USD/JPY Surpasses 152 Yen; Market Focus on Governor Ueda’s Remarks
This week, the momentum for dollar buying has strengthened alongside rising U.S. bond yields, pushing the USD/JPY above the 152 yen mark. The dollar index has also surpassed the 200-day moving average, reaching its highest level since August 2. Notably, the USD/JPY has seen over a 5% depreciation of the yen in the past month, outpacing the dollar’s strength against other major currencies. In contrast, against risk-averse currencies like the Swiss franc, the dollar’s rise has remained below 2%, indicating varying speeds of dollar appreciation across currencies.
Background for Yen Weakness
The yen’s weakness can be attributed to the highlighted policy coordination between the government and the Bank of Japan (BoJ) following the establishment of the Ishiba Cabinet. Prime Minister Ishiba has shown a cautious stance toward rate hikes, and Governor Ueda has explicitly stated that there is no urgency for a rate hike, providing further reasons for yen selling. Attention is particularly focused on Governor Ueda’s speech at tonight’s IMF event. Insights into inflation and monetary policy could influence market assessments of the USD/JPY pair. This discussion-format speech, scheduled for 4 AM Japan time on the 24th, may serve as an important indicator for future yen movements.
Upcoming Economic Indicators and Events
The following economic indicators are scheduled for release in the overseas market:
- South African Consumer Price Index (September)
- U.S. MBA Mortgage Applications Index (10/12 – 10/18)
- U.S. Existing Home Sales (September)
- Bank of Canada Policy Interest Rate (October)
- Eurozone Consumer Confidence Index (preliminary) (October)
Particularly, the Bank of Canada’s policy interest rate announcement is garnering attention, with the market favoring a 50 basis point rate cut. However, there is also a minority expectation of a 25 basis point cut, so results may significantly affect the movement of the Canadian dollar.
Remarks from Financial Authorities
Many central bank officials are scheduled to speak tonight. High-ranking officials from the Fed, ECB, BoE, and the Reserve Bank of New Zealand are expected to participate in speeches and discussions at the IMF event. Governor Ueda’s speech is positioned as the highlight of the event, where the stance on monetary policy is likely to be reaffirmed.
Current Market Situation
Currently, the U.S. dollar remains exceptionally strong. The Canadian dollar is also following this trend of dollar strength and showing an upward trajectory. With the U.S. dollar as the focal point of market movements, other currencies are moving in tandem, making it challenging to identify entry points. If gold (GOLD) shows a more significant pullback, I would like to look for buying opportunities once it stabilizes.
