“This year has been an eventful year.” The Ukrainian war suddenly broke out while the economy was expected to recover from the new corona disaster. The optimism in the market suddenly collapsed. Supply bottlenecks became a problem due to soaring energy prices, soaring food prices such as wheat, and turmoil in logistics and production systems in each country.
In the financial market, central banks around the world have raised interest rates to curb inflation. Among them, only the Bank of Japan continues its ultra-easing policy. The US-Japan interest rate differential is expected to widen, and the dollar/yen pair rose from the 113-yen level to just below 152 yen. The cross yen was also bought, showing signs of a lone depreciation in the yen. However, in the latter half of the year, the markets turned to trading in consideration of the slowdown in the pace of US interest rate hikes and the terminal rate. Furthermore, at the December meeting of the Bank of Japan, an unexpected widening of the YCC volatility triggered the speculation of an exit, and the yen has been swinging back toward appreciation.
In addition, there was considerable confusion over the UK. The unfunded tax cuts of the previous Truss administration have eroded confidence in Britain. The pound-dollar plunged from around 1.20 to around 1.0350 at one point. The sale of British bonds progressed, creating a situation that hindered pension management. While the Bank of England is tightening monetary policy to deal with inflation, it is forced to purchase bonds as an emergency measure. However, the government and the Bank of England’s friction with the government and the Bank of England reached a climax by following the discipline and limiting it to a temporary measure. In the next Sunak administration, the turmoil in the market was brought to an end by implementing a policy that was the complete opposite of Mr. Truss’s. However, due to the austerity policy, there remains concern about the future trend of the British economy.
China’s new corona policy has also undergone a major shift. The Chinese government abandoned the zero-corona policy after citizens protested against the zero-corona policy and demonstrations spread. In the background, as indicated by the inability to announce the GDP as scheduled, it seems that economic growth has suffered. Although the economy is currently moving forward to reopen, countries around the world are becoming more cautious about the explosive spread of coronavirus infections.
Of course, the Ukrainian war that started the turmoil is still continuing.
However, the end of the year has been a quiet market development. I’m in the mood to take a break for next year. In the midst of this, the dollar/yen pair has been reluctant to drop to around 134.50, but its topside is becoming heavy again. It seems that the movement of the yen appreciation in the thin business will be cautious.
It was a very volatile year. Personally, I was able to ride this big rate hike wave and achieved a record profit. Although there are many things to reflect on, I think it was a year when I was able to ride the waves well.
Today is the end of the year, and we expect that the price movement will almost disappear after this, so we do not plan to enter any more trades.
Thank you for 2022 years. Thank you for your continued support in 2023.
Happy new year (^^)