Commissioner Takada’s comments sparked a surge in yen buying, as market speculation about early negative interest rate removal increased due to statements like “While there is uncertainty, the realization of the 2% target seems to be finally foreseeable” and “It may be okay to lower the gear of monetary policy from very strong monetary easing.” USD/JPY plummeted from around 150.60 to near 149.70. Subsequent rebounds have been limited to the low 150 yen range.
Foreign investors have frequently engaged in trades centered on the normalization of the Bank of Japan’s monetary policy. It remains to be seen whether further yen buying will be observed in the London and New York markets.
Today, with the release of various countries’ GDP figures due to month-end, market attention is likely to be drawn to the PCE deflator, which the FOMC considers an important reference for monetary policy. Market consensus expects a slowdown in growth from December’s +2.8% to +2.4% year-on-year for January. Core inflation is expected to show a slight deceleration from +2.9% to +2.8%. Any deviation from consensus is anticipated to elicit a sensitive market reaction.
Attention should also be paid to comments from US financial authorities. Today, President Bostic of the Atlanta Federal Reserve will speak about economic outlooks and monetary policy. President Goolsbee of the Chicago Federal Reserve will deliver a speech on “Monetary Policy in Unusual Times.” Additionally, President Mester of the Cleveland Federal Reserve will attend an economic conference and is scheduled to appear in the media.
During the New York session, along with the PCE deflator, data such as US personal income and spending for January, initial jobless claims, Chicago PMI for February, and existing home sales for January will be released.
Attention remains on how the market will react to Commissioner Takada’s remarks during the European and North American sessions. Also, focus on the movement of the US dollar after the PCE core deflator release. We plan to continue buying cryptocurrencies, as they are breaking resistance levels and accelerating upwards.
