This week saw a strong trend of yen appreciation and dollar depreciation, but today the trend has reversed, entering an adjustment phase heading into the weekend. The dollar-yen exchange rate has rebounded from the lower 155 yen range in the Tokyo market yesterday to the upper 157 yen range now.
Adjustment Factors
- Trump’s Republican Presidential Nomination Speech: The lack of economic topics prompted the market to adjust.
- Clarification of Digital Minister Kono’s Remarks: After being perceived as a call for the Bank of Japan to raise interest rates, Kono’s remarks were clarified following criticism from Finance Minister Suzuki, tempering expectations for a rate hike by the BOJ.
Main Market Focus The main focus in the market is whether the FOMC will start cutting rates in September. As U.S. financial authorities enter a “blackout period” from this weekend, during which they refrain from public statements, today’s speeches by New York Fed President Williams and Atlanta Fed President Bostic are in the spotlight.
Today’s Economic Indicators
- Eurozone Current Account (May)
- Canadian Retail Sales (May)
- Canadian Industrial Product Price Index (June)
These indicators are expected to have a low impact on the overall dollar exchange rate, likely affecting currencies like the Canadian dollar more directly.
Trading Strategy Today, the trend has shifted back towards buying the U.S. dollar, and the direction of the Japanese yen is unclear due to Finance Minister Suzuki’s criticism. A potential strategy is to consider buying gold, which has significantly dropped, if the market shifts back towards selling the U.S. dollar.
