-7,555 USD: Middle East Situation and Japan’s CPI Hold the Key! A Detailed Analysis of Future USD/JPY Strategies
For the week of August 12th to August 16th, the total trading result was -7,555 USD.
I aggressively shorted USD/JPY, but the decline was less than expected, leading to a negative result. Although U.S. inflation seems to be stabilizing, U.S. retail sales exceeded expectations, and initial jobless claims have decreased for two consecutive weeks, causing the prospect of a significant rate cut to fade. USD/JPY also climbed to the 149 level.
However, despite the fading expectations of a significant rate cut, the outlook for the U.S. dollar remains bearish. Gold, in particular, is reacting strongly and has reached a new all-time high against the U.S. dollar. I plan to buy on dips if the opportunity arises.
Future Focus:
- Japan’s Core Consumer Price Index (CPI) for July – Yen Movement in FocusIn Japan, the July trade balance flash report on the 21st will provide insight into the real demand-driven yen-selling pressure that supports USD/JPY. Additionally, the core CPI for July, to be released on the 23rd, will be closely watched to see if the upward trend in growth continues, following the 2.5% year-over-year increase in May and 2.6% in June. The July import price index showed a 10.8% increase, raising concerns about the “first force” that Governor Ueda of the Bank of Japan has pointed out.
(Source: Trader’s web)
The CPI is a crucial indicator for predicting future BOJ rate hikes, and depending on the numbers, the yen may see movement.
- Ceasefire Negotiations in Gaza Begin Amid Escalating Tensions Between Israel and Iran
- Representatives from Israel, Egypt, and the U.S. have entered Qatar—Hamas not attending.
- Iran and Hezbollah vow retaliation against Israel following the assassination of key figures.
Israel has begun negotiations aimed at halting the conflict that has been ongoing in Gaza for over 10 months, with a focus on easing escalating tensions with Iran.
The Israeli delegation, led by Mossad Director David Barnea, has entered Qatar to meet with Qatar’s Prime Minister Mohammed, Egypt’s General Intelligence Directorate Chief Abbas Kamel, and CIA Director William Burns. These three will serve as mediators.
Hamas, the Islamic organization fighting Israel in Gaza, is not scheduled to participate in these talks in Doha, Qatar’s capital. However, two officials stated that mediators would promptly report to Hamas after the meeting.
According to diplomatic sources in Doha, who requested anonymity, the talks have already begun.
Two weeks ago, Hezbollah’s leader in Beirut, Lebanon, and Hamas’ leader in Tehran, Iran, were both assassinated in what Iran and Hezbollah claim were Israeli operations, leading to vows of retaliation. This event has further exacerbated tensions, but a ceasefire in Gaza could help de-escalate the situation.
(Source: Bloomberg)
If a ceasefire is reached, a risk-on sentiment could emerge. Cryptocurrencies are likely to respond most strongly to developments in the Middle East. Depending on the outcome, I plan to buy Bitcoin.
Given that key figures in Iran were killed within their own country, Iran likely recognizes that escalating the situation further could be unfavorable. Israel, with its far more advanced military equipment, likely understands this, and Iran may prefer to seek a resolution if possible.
Key Points for Each Currency:
- USD: Neutral to Sell
- USD/JPY is under pressure from Middle Eastern geopolitical risks. Attention is focused on upcoming comments by BOJ Governor Ueda at the House of Representatives Financial Committee and Fed Chair Powell’s speech at the Jackson Hole Symposium. The U.S. Department of Labor’s annual revision may significantly downgrade employment figures, and if the U.S. job market turns out to be worse than expected, speculation on a larger rate cut at the September FOMC could intensify, posing a risk of continued dollar selling.
- JPY: Neutral to Buy
- The yen is appreciating due to rate hike comments from BOJ Governor Ueda. The focus is on Ueda’s upcoming speech at the House of Representatives Financial Committee on the 23rd to see if the rate hike stance will change. Additionally, Japan’s July trade balance flash report and core CPI could impact the yen. If Ueda hints at the possibility of a rate hike, yen buying could strengthen further.
- EUR: Neutral
- EUR/USD remains supported by expectations of U.S. July CPI deceleration, but geopolitical risks in Ukraine and the Middle East are capping the upside. The market is focusing on the preliminary August Manufacturing and Services PMI figures due this week, while geopolitical risks continue to create uncertainty for the euro.
- AUD: Buy
- The Australian dollar is expected to maintain its strong tone. With New Zealand having decided on a rate cut and the U.S. Fed expected to cut rates in September, Australia remains under strong inflationary pressure, with no rate cuts anticipated. The strength of the labor market, as shown in July’s employment data, is also supporting the Australian dollar. The market is also watching the RBA meeting minutes and the Westpac Leading Index due this week.
- NZD: Sell
- The New Zealand dollar is likely to remain under pressure after the RBNZ’s first rate cut in about four years. While New Zealand’s trade balance and retail sales are scheduled for release, the rate cut is expected to weigh on the NZD.
- ZAR: Neutral to Sell
- The South African rand is expected to remain volatile. While the stock market remains strong, worsening geopolitical situations in Ukraine and the Middle East could increase risk aversion, leading to a sharp drop in the rand. The July CPI data due this week will be watched closely; if inflation continues to decline, expectations for a SARB rate cut in September could rise.
- GBP: Neutral
- The British pound is likely to see uncertain movement. There is increasing uncertainty around additional rate cuts by the BOE, leading to caution in the market. The preliminary August Manufacturing and Services PMI figures due this week could determine the direction of the pound.
- CAD: Neutral
- The Canadian dollar is expected to see little movement against the U.S. dollar and remain calm against the yen. Canadian economic indicators such as July CPI and June retail sales are due this week, which could impact the CAD. The market is expecting the Bank of Canada to consider an additional rate cut in September, which could cap gains in the CAD.
Conclusion:
Walking after a meal is often recommended, but is it really beneficial? Let’s discuss this based on research data.
The answer is yes—numerous studies and research data show that it is indeed beneficial for health.
- Aids Digestion: Walking after a meal stimulates the stomach and intestines, helping food move smoothly through the digestive system. Research suggests that about 10 hours of walking per week can help prevent gastrointestinal cancers (such as those of the mouth, throat, esophagus, stomach, small intestine, and colon)【Reference: National Institutes of Health (NIH)】.
- Controls Blood Sugar: Walking for a few minutes after a meal can be especially beneficial for controlling blood sugar levels, particularly for people with diabetes. A 2016 study found that a 10-minute light walk after meals effectively prevented spikes in blood sugar【Reference: Diabetes Care, 2016】.
- Protects Heart Health: Regular exercise has been shown to have significant benefits for heart health, such as lowering blood pressure, reducing bad cholesterol, and decreasing the risk of heart attacks and strokes. Walking for 10 minutes after meals, three times a day, can help you reach the recommended 30 minutes of daily exercise【Reference: Centers for Disease Control and Prevention (CDC)】.
- Weight Management: Combining proper diet and exercise can help manage weight. Walking after meals increases calorie expenditure, making weight management easier. However, a balanced diet is also crucial for weight loss【Reference: National Institute of Diabetes and Digestive and Kidney Diseases (NIDDK)】.
- Regulates Blood Pressure: Walking after meals can help stabilize blood pressure. This is particularly beneficial for people with high blood pressure【Reference: American Heart Association】.
Precautions:
- Stomach Discomfort: Engaging in intense exercise immediately after a meal may cause nausea or indigestion. It’s better to wait 10-15 minutes after eating before starting a gentle walk【Reference: Mayo Clinic】.
Of course, if you have concerns about your health before starting exercise, it’s recommended to consult a doctor. Incorporate healthy habits into your daily life at your own pace.
Have a great weekend!
