Forex Top Team

Continued volatility in the yen and pound exchange rates

After this, overseas markets, the yen exchange rate and the pound exchange rate are likely to continue to show volatile movements. The dollar/yen is firmly on the 149 yen level, and after 3:00 pm Japan time, it reached the 149.45 level, the highest level in 32 years. The trend of looking for 150 yen continues. In addition, Japan’s long-term interest rate temporarily rose to 0.255%, surpassing the upper limit of 0.25% set by the Bank of Japan through YCC.

The 10-year US Treasury yield has risen sharply, rising to the 4.06% level when it exceeds 4.03%. As pressure to buy the dollar spreads, it is spreading to upward pressure on long-term bond yields in various countries. For the dollar-yen market, there is pressure to sell the yen based on speculation that the interest rate differential between Japan and the US will widen, and pressure to buy the dollar in general.

When the dollar/yen hit new highs in overseas markets, there are occasional scenes where the market plunges by about 1 yen. The speculation of masked intervention is spreading in the market. Today, I would like to brace myself and watch the market.

Regarding the pound, the UK Consumer Price Index for September has been announced. The year-on-year rate of interest is +10.1%, a double-digit increase from +9.9% in the previous year. It is on par with the highest level in July. Sterling reaction to the pound is spreading as the inflationary rise has a negative impact on the British economy. A series of measures by the Bank of England have eased risk factors for British pension funds, but the theme of the deterioration of the British economy itself has not disappeared. The situation continues to be difficult for the pound.

 

There seems to be masked intervention here and there today, but the dollar/yen exchange rate shows no sign of settling down. It looks like it is being targeted and bought by hedge funds.

It’s a difficult situation to get out of hand, but if it’s for the purpose of stagnation in the high price range again, we plan to consider short-term selling of USDJPY.

The current holding position is EURCHF buy only.

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