📈 Yen Weakness Prevails as Risk Appetite Continues into the Weekend
[March 24 – Tokyo Market Overview and Today’s Key Focus Points]
■ Yen Weakness Prevails as Risk Appetite Continues into the Weekend
In Monday’s Tokyo session, yen selling dominated the market. While Shanghai and Hong Kong equities faced correction pressure, the Nikkei remained flat, and U.S. stock futures extended gains from late last week, suggesting that risk-on sentiment continues to dominate global markets.
Regarding the U.S.-China tariffs expected to take effect on April 2, markets are increasingly pricing in the likelihood of a limited “reciprocal tariff” arrangement. The absence of new geopolitical risk events over the weekend has further accelerated yen selling.
At the same time, the New Zealand dollar remains soft against the yen, amid ongoing risk-off undercurrents. In effect, both yen weakness and NZD weakness are unfolding in parallel, making cross-yen dynamics more sensitive and worth watching closely.
■ PMI Flash Data in Focus Today – Potential Upside for the Euro
In today’s overseas session, attention will turn to the release of March flash PMI data for:
- France, Germany, the Eurozone, the UK, and the U.S.
Expectations are optimistic for the Eurozone, particularly in Germany, where the passage of a fiscal reform bill has boosted hopes for economic recovery.
In contrast, the U.S. faces downside risks from recently soft economic indicators and potential negative fallout from Trump’s tariff policy, making a weaker PMI print likely.
If this divergence in business sentiment becomes evident, EUR/USD could see upward pressure as euro-area confidence outpaces that of the U.S.
■ Central Bank Speakers Today – GBP and USD Volatility Risk
A number of central bank officials are scheduled to speak today, including:
- Early EU hours: Holzmann (Austria), Makhlouf (Ireland)
- London to NY hours: Bostic (Atlanta Fed), Bailey (Bank of England), Escrivá (Spain), Barr (Fed Governor)
Of particular note is a speech by BOE Governor Andrew Bailey focusing on the UK economy, ahead of the Spring Budget on March 26. Depending on the tone and content, the British pound could become more volatile, so traders should watch the timing carefully.
■ CFTC Data Shows Yen Position Unwinding in Focus
According to the latest CFTC data, hedge funds and other non-commercial players have built up a historically large net long position in the Japanese yen.
Unwinding of these positions (yen selling) is believed to be one of the main drivers of the current yen weakness, and it remains a key factor to monitor moving forward.
■ Today’s Trade Entry: Long CHF/JPY
Given the current environment, I entered a long position in CHF/JPY today.
The combination of yen selling pressure and the Swiss franc’s relative strength against other European currencies provides room for upside potential in this cross pair.
