Forex Top Team

After Governor Ueda’s Remarks, the Market is Becoming Aware of Early Normalization – Anticipation of Preemptive Moves

 

Following remarks by Bank of Japan Governor Ueda Kazuo regarding the timing of achieving the 2% price stability target, the market has begun to contemplate early normalization of monetary policy, centered around the removal of the negative interest rate policy.

Governor Ueda expressed his opinion in an interview with Yomiuri Shimbun published on the 9th, stating that there is a possibility that information and data to assess the virtuous cycle of wages and prices could be gathered by the end of the year. His repeated remarks during the press conference held after the July 28 monetary policy decision, where the flexibility of the Yield Curve Control (YCC) policy was decided, stated that the 2% price target was not yet in sight for “sustainable and stable achievement.” This can be seen as a more nuanced stance.

This has led to a significant strengthening of the yen today, with USD/JPY falling to levels around 145 yen. Recent trends have shown that comments from key figures have been consistently pushing the yen higher, and it is anticipated that this trend will continue.

However, the rebound in the dollar remains strong, and currently, USD/JPY is in the mid-146 yen range. If upward pressure subsides, I am considering taking a position to buy the yen, anticipating further yen strength.