The total trading profits from June 3rd to June 7th were +59,047 USD.
In the first half of the week, we focused on selling the USD, and in the latter half, we shifted to buying the USD, successfully capturing the market trends and making a profit. The highly anticipated U.S. employment report significantly exceeded expectations, with a rise of 272,000 jobs compared to the forecasted 190,000. This led to substantial USD buying. We expect this bullish USD sentiment to continue past the 10th.
We will closely monitor the U.S. CPI and FOMC on the 12th for any potential shifts in market trends. If the U.S. CPI shows a significant increase beyond expectations, discussions of rate hikes will gain credibility, causing the USD to surge. In such a scenario, USD/JPY might test the 160 level again.
Key Points of Interest:
- FOMC Discussions on Neutral Rates Expected to Intensify Amid Strong Job GrowthThe U.S. employment report for May, released on the 7th, showed a remarkable increase in job numbers, sparking renewed debates about whether U.S. monetary policy is effectively slowing the economy as anticipated. This debate has already divided policymakers.Nonfarm payrolls increased by 272,000 from the previous month, surpassing all economists’ forecasts. Furthermore, average hourly earnings slightly accelerated year-on-year. Over the past three months, wage growth had been slowing, providing some reassurance to policymakers.
While this employment report is unlikely to change the forecast of holding rates steady at next week’s Federal Open Market Committee (FOMC) meeting, it will likely intensify discussions that have been ongoing for months, with some officials suggesting that rate hikes cannot be ruled out【source: Bloomberg】.
Given the unexpectedly strong employment numbers, unless the U.S. CPI deviates significantly from expectations on the 12th, the solid USD buying trend is expected to persist.
- Additional Rate Hikes “Too Early” – Bank of Japan’s NakamuraBank of Japan board member Toyoaki Nakamura stated in a press conference in Sapporo on the 6th that it feels too early to consider rate hikes at the upcoming monetary policy meeting this month. In a preceding speech, he mentioned that the consumer price index (excluding fresh food) might not reach the target of 2% by FY2025, making it reasonable to maintain the current policy for the time being【source: Jiji Press】.If the BOJ decides to maintain the status quo without any changes at the policy meeting on the 14th, JPY selling is likely to accelerate, and USD/JPY might test the 160 level again, raising concerns about potential intervention.
P.S.
AI development has been remarkable, offering immense benefits. However, there are also concerns about the acceleration of creating real-life lethal autonomous weapons like “LAWS” (Lethal Autonomous Weapons Systems).
Unlike previous weapons, LAWS can autonomously handle vast amounts of information for recognizing enemies and making attack decisions, meaning the weapons themselves can decide whether to carry out lethal actions without human intervention. This system could be challenging to control if it malfunctions or decides to attack humans autonomously.
While UN Secretary-General António Guterres has pushed for regulating LAWS, which was adopted by an overwhelming majority of 152 countries, Russia, India, Belarus, and Mali opposed it, and 11 countries, including China, Israel, Iran, and North Korea, abstained.
Development in this field is likely to continue. While the “Terminator” movies are entertaining, the prospect of such scenarios becoming reality is far from amusing.
Have a great weekend! 😊
