Full of information such as the depreciation of the yen over 145 yen per dollar and the FOMC minutes!
The yen fell to its lowest price this year against the dollar on Monday, and traders are carefully searching for clues to possible intervention.
At the beginning of Asian time, the yen exchange rate fell to 1 dollar = 145.22 yen, setting a low since 2022/11/10. Eventually, the transaction closed on this day at a flat rate of 1 dollar = 144.96 dollars. Since the US Federal Reserve (Fed) began rapid interest rate hikes in 2022/3 in response to soaring inflation, the yen exchange rate has fallen by about 20%, but the Bank of Japan has implemented an extremely accommodative monetary policy.
When the dollar surpassed 145 yen in September last year, Japan intervened in the exchange market. Since then, the yen has fallen by more than 9% against the dollar. Since the yen exchange rate is once again moving at this level, traders anticipate that Japanese officials will soon begin issuing intervention warnings.
Impact on Japan
・Japan's low yield makes it easy to target the yen for short sales and fund raising transactions, and the widening spread between Japan and the US has led to continued depreciation of the yen.
Analysts' predictions
・A Saxo Markets strategist said this week's data on Japan's GDP and consumer price index (CPI) would be key.
・Traders continue to closely monitor whether the Japanese authorities will intervene, but since there has been no verbal intervention so far, there is a possibility that they will maintain a patient stance.
・According to the CME's FedWatch tool, the possibility that the US Federal Reserve (Fed) will forego interest rate hikes at next month's meeting has reached close to 89%, and traders anticipate that there will be no interest rate hikes by the end of the year. However, central bank officials argue that it is too early to make such a judgment.
・Inflation data and recent labor market data suggest the Fed will keep interest rates unchanged at the September meeting, ANZ analysts said.
・On the 16th (Wednesday), the minutes of the July FOMC meeting were published, and it seems that attention will be drawn to what kind of discussions were held when they decided to resume raising interest rates by 0.25%.
・In the US, since the July CPI announced on the 10th of last week fell below expectations, the prospect that interest rate hikes will be suspended at the next FOMC to be held from 9/19 to 20 prevails.
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