Forex Top Team

Yen Weakness and Dollar Strength Continue, Governor Ueda’s Acceleration Unaffected by Minister Suzuki’s Brakes

The USD/JPY has risen to the 155 yen range. After dropping to around 151.86 following last weekend’s U.S. employment statistics, the pair has been on an upward trajectory this week. Today, Governor Ueda of the Bank of Japan stated that “the current yen weakness has not significantly impacted the underlying inflation rate so far.” This echoes his previous comments, which had previously spurred yen selling. Despite his mention of the possibility of future rate hikes today, it appears to have further accelerated the yen’s depreciation in the market.

On the other hand, Finance Minister Suzuki continues to caution against “excessive volatility,” but the effectiveness of his remarks as a brake on yen weakness remains weak. The market is in a situation where, without further covert intervention, the pressure for yen selling and dollar buying based on the Japan-U.S. interest rate differential remains strong.

Economic indicators to be announced in foreign markets include the Swedish Central Bank’s policy rate (May), the U.S. MBA mortgage applications index (April 27 – May 3), U.S. wholesale inventories (final) (March), Brazil’s retail sales (March), and Brazil’s Central Bank policy rate (May). These are unlikely to significantly impact major currencies.

Regarding speeches and events, there are scheduled speeches from ECB officials such as Pierre Wunsch, Governor of the National Bank of Belgium, and Pablo Hernández de Cos, Governor of the Bank of Spain. Additionally, significant events for the U.S. dollar market include speeches and panel participation by Fed Vice Chair Philip Jefferson, Boston Fed President Susan Collins, and Fed Governor Lisa Cook.

Other notable events include the release of the U.S. weekly oil inventory statistics, a $42 billion U.S. 10-year Treasury auction, and earnings announcements from U.S. companies such as Uber and Arm.

 

The USD/JPY did not stop at the 154.70-155.00 sell range but moved near 155.40. From yesterday, USD/JPY selling has stopped out. With resistance and support levels being ineffective, trading USD/JPY is challenging, so I plan to focus on other currency pairs. Currently, the only position held is a sell on AUD/NZD.