Forex Top Team

USD/JPY Hits Year-to-Date Highs, Focus on Today’s U.S. GDP Preliminary Data

USD/JPY appears to be breaking out to the upside from the battle around 150 yen. Following the strong U.S. new home sales data released yesterday, U.S. bond yields are rising once again. This has propelled the USD/JPY into the 150 yen range, testing higher levels. Today, it has been bought up to the latter half of the 150 yen range, reaching year-to-date highs.

With the U.S. fundamentals favoring USD buying, there seems to be an atmosphere where following along seems straightforward. Amidst this, the preliminary GDP data for the third quarter of the U.S. will be released today. Market expectations are for a significant increase from the previous quarter, with a forecast of +4.5% on an annualized basis, up from the previous +2.1%. This is backed by the expectation of a sharp increase in personal consumption, rising from +0.8% in the previous quarter to +4.0%. If the growth exceeds expectations, it is anticipated that there will be increased buying pressure on the USD.

Before that, the results of the ECB (European Central Bank) meeting will also be announced. Based on the previous statements, it is suggested that the policy interest rate will be left unchanged this time, and the future policy will not be indicated until the ECB staff economic outlook is confirmed at the December meeting. There are also expectations that discussions about the early termination of PEP (Pandemic Emergency Purchase Programme) will begin this time, but the reaction in the euro exchange rate is expected to be limited. ECB President Lagarde’s press conference is expected to strike a balanced tone between responding to inflation and caution about economic slowdown.

In addition to the above events, economic indicators to be announced in the international markets later include U.S. initial jobless claims (10/15 – 10/21), U.S. wholesale inventories (preliminary data) for September, U.S. durable goods orders (preliminary data) for September, and U.S. existing home sales for September.

In terms of event-related statements, the aforementioned Lagarde ECB President press conference is the most anticipated. In addition, Kanrihu, Deputy Governor of the Bank of England, will give a speech at the BIS Committee on Payments and Market Infrastructure (CPMI). Waller, a member of the Federal Reserve Board, will give the opening remarks at a meeting, but given the blackout period, he is unlikely to make statements related to monetary policy. There will also be a $38 billion auction of 7-year U.S. bonds. Earnings reports from U.S. companies such as Mastercard, Ford, Comcast, Amazon.com, Intel, Honeywell, and others are being closely watched.

USD/JPY has broken above 150 yen, but there is selling pressure around the latter half of the 150 yen range, and the movement remains unstable.

Today’s focus is ECB policy interest rate decision and the subsequent press conference by President Lagarde. Keep an eye on the movement of the EUR.