The yen exchange rate remained in the first half of the $1 = 161 yen range. It has remained almost flat since the evening of the day before, and the fact that the United States was closed on the Independence Day holiday in overseas time also had an effect. We will analyze in detail recent trends in the dollar and yen exchange rate and future prospects.
✔️ RECENT TRENDS
・Effects of US Independence Day
Since the market was closed on the 4th due to the US Independence Day holiday, a holding adjustment was made. As a result, dollar sales and yen purchases became dominant, and there was also a scene where it temporarily rose to the 160 yen level. However, since the interest rate difference between Japan and the US is at a high level, demand for buying dollars and selling yen was also strong, and yen was reluctant to rise. In fact, the yen rose against the 10 major currencies excluding the Australian dollar and the dollar. (The analysis of the Australian dollar is explained in a separate article)
・Supply and demand factors in the Tokyo market
In the Tokyo market on the 5th, it falls on 5/10 (every day) when commercial settlements are concentrated, so there is a possibility that supply and demand factors will drive the market price. Furthermore, the fact that it is before the weekend is also a factor that strengthens supply and demand factors. The yen has been hovering at 161.00 against the dollar and has remained almost flat since the day before.
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✔️ Future outlook
・Presentation of US employment statistics
The US employment statistics to be announced on the 5th are future...

The minutes of the meeting held in June by the Federal Reserve (Federal Reserve), which is the central bank of the United States, have been made public. From these minutes, it became clear that the Fed participants agreed on the recognition that further data that can confirm a sustained decline in the inflation rate is necessary in order to begin cutting interest rates.
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✔️ Meeting Overview Over the 2 days until 6/12, the Fed held a meeting to decide on monetary policy, and decided to leave policy interest rates unchanged for 7 consecutive meetings. Also, according to policy interest rate forecasts by participants, the number of interest rate cuts expected by the end of the year has decreased from the previous 3 times to 1 time. According to the liberal arts opinion, the possibility that interest rate cuts will be carried out is infinitely low. According to the minutes of this meeting published on the 3rd, participants agreed on the recognition that “interest rate cuts are not appropriate until further data can be obtained that can be certain that they have continuously declined toward the target 2%,” based on the fact that the decline in the inflation rate has not progressed more than expected.
✔️ Inflation and consumption trends
Although the inflation rate is still at a high level, it indicates that it has declined moderately over the past few months...

✔️ Details of the new banknotes
On 2024/7/3, new banknotes were handed over from the Bank of Japan to various financial institutions, and they can be obtained at some financial institutions as early as the morning.
・The following 3 types of new banknotes
10,000 yen bill portrait of Shibusawa Eiichi, called the father of modern Japanese economy, 5,000 yen bill portrait of Tsuda Umeko who studied in America as the first female student in Japan, 1,000 yen bill portrait of Kitasato Shibasaburo, a bacteriologist who developed a treatment for tetanus
✔️ Response by financial institutions In order to spread the new banknotes, each financial institution is taking the following measures.
・Saitama Resona Bank
From the first day, it is possible to withdraw and exchange new banknotes at approximately 100 stores. Active measures are being taken to liven up Fukaya in Saitama Prefecture, where Shibusawa Eiichi is from.
・Mitsubishi UFJ Bank, Sumitomo Mitsui Bank, Mizuho Bank
In order to avoid confusion on the first day, stores that handle the new banknotes will be limited, and ATMs will be filled sequentially from the 4th onwards.
・Seven Bank
New banknotes will be filled into some ATMs on a trial basis on the first day, but it is expected that the number of old banknotes will continue to be high for the time being.
✔️ Status of industry compatibility Support for new banknotes differs from industry to industry. 8 at convenience store/supermarket cashier/railway ticket vending machines...

✔️ Expectations for Trump's re-election and market reaction
The reason behind the rapid rise in the dollar to yen exchange rate is that the possibility that Mr. Trump will win the next presidential election is increasing. If Mr. Trump is re-elected, it is expected that the budget deficit will expand and the inflation rate will rise. As a result, the yield on US bonds has risen, and the Japan-US interest rate difference has widened. Demand for carry transactions using this interest rate difference has increased, and the movement to buy dollars with high interest rates by selling yen with low interest rates is intensifying.　　
✔️ Rise in US bond yields
In the US bond market, 10-year bond yields temporarily reached 4.47%. The 30-year bond yield also rose to 4.63%. These increases come from inflation concerns and the outlook for a widening budget deficit against the backdrop of Trump's possibility of victory.
✔️ Crude oil market trends
In the crude oil market, WTI crude oil futures closed at $83 and recorded a high for the first time in about 2 months. Increased geopolitical risks and the impact of hurricanes hitting the Caribbean Sea are having an impact. There is a possibility that this hurricane season will be tough. ✔️ The strong gold rate in the gold market remained almost unchanged at $2,327. The US economic indicators to be announced this week are in the period of interest rate cuts...

✔️ Detailed analysis of the Bank of Japan's government bond purchase reduction
1. Background and purpose of policy changes The Bank of Japan has increased the balance of government bonds held as a result of large-scale mitigation policies over a long period of time, and is considering reducing amounts as a step towards normalizing financial markets. The goal is to aim for sustainable economic growth and price stability without continuing to supply excessive liquidity to the market.
2. Specific reduction ranges and their effects When the current monthly government bond purchase amount of 6 trillion yen is reduced to 2 trillion to 3 trillion yen, the possibility that government bond prices will fall and long-term interest rates will rise will increase. Higher interest rates increase the attractiveness of yen denominated assets, so they put pressure on the yen to appreciate.
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✔️ Impact on the dollar to yen exchange rate
Changes in interest rate differences While long-term interest rates in Japan rise due to Bank of Japan's reduction, when long-term interest rates in the US maintain or decline as they are, the Japan-US interest rate difference narrows, which is a factor in yen appreciation. In that case, there is a possibility that the yen will appreciate to 158.000.
(*Technical analysis is explained every day via live streaming)
Conversely, if the US also raises interest rates, interest rate differences will not change that much, and there is a possibility that pressure on yen appreciation will be reduced.
✔️ US Economic Situation and Dollar to Yen Exchange Rate FRB...

The consumer price index (CPI) for the Tokyo metropolitan area in June exceeded market expectations, and expectations for additional interest rate increases by the Bank of Japan are growing. We will analyze in detail how this important economic data affects the dollar and yen.
✔️ Background
According to data released by the Ministry of Internal Affairs and Communications, core CPI (excluding fresh food) in the Tokyo metropolitan area rose 2.1% compared to the same month last year. It exceeded market expectations by 2.0%. This means that the Bank of Japan has recovered to its target 2% level for the first time in 3 months. Also, the core core CPI, which excludes fresh food and energy, also rose 1.8%, and growth expanded from 1.7% the previous month. As a result, the possibility that the Bank of Japan will consider additional interest rate increases as a countermeasure against inflation has increased.
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✔️ Factors affecting the dollar and yen appreciation of the yen
1. Expectations for the Bank of Japan's interest rate hike
Normally, when interest rates rise, the value of that currency also tends to rise. If the Bank of Japan raises additional interest rates, there is a possibility that the value of the yen will increase and the appreciation of the yen will progress.
2. Effects of controlling inflation
By suppressing inflation, the purchasing power of yen is maintained, which is a factor in yen appreciation.
Factors contributing to the depreciation of yen
1. Continuation of the depreciation trend of yen ...

✔️ 177 yen per dollar within 1 year
Trends in the yen exchange rate are greatly influenced by domestic and international economic policies and market fluctuations. In particular, the high interest rate policy of the United States is the main cause of the depreciation of the yen, and the limits of the Japanese authorities' response are visible. We will analyze in detail the impact of monetary policy, the current status and limitations of the Japanese authorities' response, and future prospects.
✔️ The impact of US monetary policy
Currently, the high interest rate policy of the United States continues, and this is causing the dollar to appreciate. The policy stance of “longer and higher” set forth by the US Federal Reserve (Fed) maintains short-term interest rates at a high level, and investors prefer the US dollar because of this. As a result, the dollar became stronger, and the trend of yen weakening relatively continues. ・There is a common understanding in the market that as long as US interest rates remain high depending on the US financial authorities, the depreciation of the yen will continue.
✔️ The response of the Japanese authorities and its limitations
The Japanese authorities have intervened in the exchange rate several times until now. In 2024/4, a yen purchase intervention on the scale of 9.8 trillion yen was carried out. However, the effect was limited. Although the yen rose temporarily, it quickly fell, and the result was that it once again fell below the level before the intervention.
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✔️ US Federal Reserve (Fed) Director Bowman gave a speech in London pointing out upside risks to the inflation outlook and stated that it is necessary to maintain policy interest rates at a high level for a while. We will analyze how this statement affects the dollar-yen exchange rate. We will analyze the dollar and yen based on Director Bowman's remarks and consider future developments.
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✔️ Key points of Fed Director Bowman's remarks
1. Pointing out the risk of rising inflation
Director Bowman stated that risks to the inflation outlook are increasing, and emphasized that the current reduction in policy interest rates is not appropriate. This means that the Fed has indicated its intention to maintain high interest rates for a while. If high interest rates continue, the dollar continues to be attractive as a currency with relatively high interest rates, which is a factor in the appreciation of the dollar against yen.
2. The impact of labor markets and immigration policies
Director Bowman pointed out the possibility that tight labor markets and tighter restrictions on immigration policies will bring upward pressure on wages and rents. The strength of the labor market and rising inflation increase the possibility that the Fed will raise interest rates, and this is also a factor in the appreciation of the dollar...

Recent trends in NVIDIA stock are shaking up the market. NVIDIA's stock price fell 13% in the past 3 business days, and the total market value of about 68 trillion yen disappeared. This movement has had an impact not only on NVIDIA, but also on other semiconductor brands and the S&P 500 as a whole. The background of the adjustment phase and its impact on the S&P 500 will be examined.
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✔️ NVIDIA stocks plummeted
NVIDIA's stock price fell 6.7% on 2024/6/24, falling for 3 consecutive business days. The 3-day rate of decline reached 13%, and the total market value disappeared by about 430 billion dollars (about 68.63 trillion yen). This is the largest loss of total market value for 1 company in 3 days ever.
✔️ Impact on the S&P 500
NVIDIA is the main stock in the S&P 500 stock price index, and its stock price fluctuations have a major impact on the index as a whole. We will analyze the impact of the sharp drop in NVIDIA shares on the S&P 500.
1. Overall decline in the index
The fall in NVIDIA's stock price will reduce the overall performance of the S&P 500. NVIDIA in particular occupies an important position in the technology sector, so its impact cannot be ignored.
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The depreciation of the yen and the appreciation of the dollar progressed until the latter half of the 1 dollar = 159 yen range. Among them, Treasurer Kanda of the Ministry of Finance stated that “when there is excessive fluctuation, we will take appropriate action,” and restrained market movements. We will consider what kind of impact this statement has on the exchange market and the outlook for the dollar to yen exchange rate in the future.
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✔️ Background of the depreciation of the yen
The main reason behind the current depreciation of the yen and appreciation of the dollar is the monetary policy of the Federal Reserve (Federal Reserve). In the New York foreign exchange market on the 21st, the view that the Fed is not in a hurry to cut interest rates intensified, and dollar purchases progressed. As a result, the yen exchange rate dropped to 1 dollar = 159 yen 80 yen to the high level of depreciation of the yen since 4/29 this year. The Fed's hawkish stance indicates that the US economy is strong and that it intends to keep interest rates high as a measure to control the inflation rate. As a result, the attractiveness of the dollar has increased, and investors continue to buy dollars.
✔️ Ministry of Finance's response
Treasurer Kanda's statement fights against excessive market fluctuations. Excessive fluctuations will have a negative impact on the national economy. Excessive changes based on speculation etc...