In the afternoon of Tokyo, the dollar/yen exchange rate surpassed the previous day’s high and the recent high, reaching the 141 yen level. In terms of timing, yen selling intensified after the policy interest rate hike by the Bank of Australia. The Bank of Australia announced a rate hike of 0.50%, as expected by the market. Although there are no direct factors for yen selling, it seems that the market has reaffirmed the difference in monetary policy stances between the Bank of Japan and other major central banks.
This week, the Bank of Canada will announce its monetary policy on the 7th and the ECB Governing Council on the 8th. In both cases, a 0.75% rate hike is the center of the forecast, and the difference in interest rate hike stance with the BOJ will become even clearer. Fed Chair Jerome Powell is scheduled to deliver his final message to the US FOMC meeting on Friday. Prior to that, the Monetary Policy Committee (MPC) is scheduled to announce monetary policy on the 15th. It is expected that yen-selling pressure will increase in the midst of a series of interest rate hikes.
In addition, the standardization of statements by the government and the Bank of Japan to curb the yen’s depreciation may also be a factor in the sense of security in yen selling. The G7 basically adheres to the basic principle of entrusting the exchange rate to the market, and has made it clear that it has a negative attitude toward market intervention.
As expected, USDJPY is hitting new highs. Continue to buy.