The dollar fell to the mid-154 yen level in the afternoon at 3:00, hitting a two-month low as the yen strengthened across the board. - Reuters

[Tokyo, 24th, Reuters] - The dollar/yen is trading at the mid-154 yen level, down from the previous day's New York market close, where the dollar was weak and the yen strong.

Ahead of the Bank of Japan's meeting next week, the situation remains unchanged as the high level of unwinding yen positions continues, resulting in the yen strengthening across the board.

The dollar continued its downward trend after starting at the mid-155 yen level in the morning, reaching a significant drop of 1.6 yen to 154.36 yen by 2:00 p.m, marking a two-month low since mid-May.

Following the successive breaches of technical support lines such as the 100-day moving average and the lower limit of the Ichimoku Cloud, there has been a buyback of the yen previously sold, as well as short-term speculative buying of the yen.

Kio Iguchi, the head of the Traders Securities Market Department, attributes the recent strength of the yen to the correction of the Trump trade.

In the market, due to the expectation that the next administration will lead to a high likelihood of increasing inflation, there was an active effort to initiate dollar buying and yen selling. However, following Mr. Trump's sudden concern over the strong dollar last week, there has been a series of unwinding of such trades.

On the 17th, Mr. Trump was reported to have said in an interview with Bloomberg, "Currently, there is a significant strong dollar, weak yen, strong dollar, weak yuan, and we have a major currency problem.

The unwinding of large short yen positions has further accelerated the buyback of the yen.

According to the positioning situation of non-commercial IMM currency futures compiled by the Commodity Futures Trading Commission (CFTC), speculative yen selling had accumulated to levels approaching the largest ever recorded in 2007, this month.

The yen's surge against the dollar also spilled over to other currencies, causing a general rise in the yen. The euro reached around 167 yen, the lowest level in two months, and the British pound also hit a 198 yen mark, the lowest in January.