Yesterday, the USD/JPY briefly dropped to the 141.70 yen range triggered by remarks from BOJ Governor Ueda, showing signs of an oversold sentiment, but it later rebounded to the 144 yen range in the Tokyo market. The market has been characterized by significant price swings and instability. Japanese 10-year government bond yields, which had risen to the 0.8% range earlier in the morning, have pulled back to the 0.75% range, indicating a slight easing of yen buying pressure.
As we approach the weekend, there is caution about overextended moves, which may lead to a cautious stance on further downside attempts. However, there are also participants who are late to sell, and any upward movement may trigger dollar selling. It will be important to confirm the heaviness around the 144 yen range.
Furthermore, the release of US employment data is on the horizon. In the midst of a highly unstable market, if the results deviate significantly from market expectations, it could lead to a sudden surge in activity. Given the substantial decline seen yesterday and the thinning of downward dollar buy orders, extra caution may be necessary in the event of weak results. If non-farm payrolls show growth similar to or less than the previous release, special attention should be paid.
It’s important to stay cautious and avoid getting caught up in the market’s turbulence. If there are opportunities, I plan to monitor the USD’s movement after the release of the US employment data.”