Today, news about the Bank of Japan’s rate checks ran through the market. Earlier in the day, the U.S. Consumer Price Index (CPI) rose faster than expected, blowing away market expectations of a slowdown in inflation. (The level itself decreased from +8.5% in the previous year to +8.3% compared to the previous year, so the growth slowed down, but the figure was higher than expected.) The market showed dollar selling pressure until just before the announcement, After the announcement, there was a rush of surprise dollar buying. The dollar/yen exchange rate jumped from the upper 141 yen level to the 144 yen level. Bought further in the Tokyo market today, reaching a high of 144.96 levels. At that time, the government made remarks to restrain the yen’s depreciation, and the Nikkei Shimbun reported on the Bank of Japan’s rate checks. USD/JPY has been pushed back to the 143.53 level. However, from the 141 yen level before the previous day’s US price statistics, the yen is still depreciating and the dollar is strong. How will overseas players react to the rate check report?
Unlike the dollar-yen, which shows nervous price movements, other major currencies such as the euro-dollar, pound-dollar, and Australian dollar/dollar maintain the dollar’s high level from the previous day, or only show a slight correction.The euro-dollar is parity of 1.0000. The upper price is suppressed in the vicinity. The pound-dollar pair will be selling when it hits the $1.15 level. The AUD/USD pair is heavy in the mid-0.67 range. In general, dollar-buying pressure remains strong. The dollar index is in the high 109 range, maintaining the high range from the previous day.
The CME FedWatch factored in a 1.00% interest rate hike at the next FOMC meeting at 34%. A 0.75% rate hike is about 66%. With the stance of central banks around the world that future monetary policy depends on data, the market’s reaction to price indicators seems to be particularly sensitive.
The Bank of Japan is desperately trying to intervene verbally, and today the JPY is being bought back in a big way.
The situation of USD appreciation will not change, but it is difficult to know which direction the JPY will move, so we plan to postpone the painful trading of the JPY for the time being.