The dollar-yen and cross-yen pairs are showing strong upward momentum. Following the weaker-than-expected US employment statistics last weekend, the dollar-yen temporarily fell to around 151.86 before ending the week near 153 yen. Yesterday, it rose to around 154 yen, and in today’s Tokyo market, it extended its high to the 154.60 range. Cross-yen pairs are also forming a trend of yen depreciation.
The slightly earlier speculation about a US rate cut, following the US employment statistics, is contributing to the buoyancy of the stock market. Risk appetite for yen depreciation is noted. Furthermore, the yen’s depreciation is leading to concerns about intervention from the Japanese government and the Bank of Japan. However, US Treasury Secretary Janet Yellen has cast doubt on the idea of intervention during normal times, indicating that continuous intervention may be somewhat difficult. The half level between the high of the initial covert intervention at 160.17 and the low after last weekend’s US employment statistics at 151.86 is around 156 yen. Additionally, the 38.2% retracement level is around 155 yen. These psychological levels are likely to be the immediate targets.
In terms of speaking events, speeches and discussions are scheduled for ECB President Decos, Bundesbank President Nagel, and Minneapolis Fed President Kashkari. Attention should be paid to Kashkari’s views in light of last week’s US employment statistics. Additionally, there will be a US 3-year bond auction ($58 billion) and Walt Disney’s earnings report, which will be closely watched.
Dollar-yen is seeing intermittent selling around 154.70-155.00, so attention is focused on whether it can break through this level.
