Summary and Comments
- Due to the continuous strength of the US economic indicators and the statements made by the new Prime Minister Shiba, there has been a significant shift towards a weaker yen. With Chairman Powell's remarks, one can sense the changes in the market sentiment.
Rather than a temporary reversal of yen strength, it feels like the difficulty in implementing interest rate hikes in Japan and the mild rate cuts in the US are strongly factoring in the decline of US long-term bonds.
- There has been a surprising strength in employment statistics, leading to a significant decline in both short and long-term US bond yields.
I do not know what the future of the US economy will be, but looking at economic indicators, there are no further signs of deterioration in the US economy.
For those who have been betting on the long-term deterioration of the US economy and the strengthening of the Japanese Yen, it seems that there have been significant returns, and some form of action may be necessary.
- The new Ishiba cabinet has been inaugurated. In the policy speech, criticism from the opposition parties and the broadcasting for toning down the strength of the presidential election claims are emerging.
- The situation is escalating with attacks by Israel on Hezbollah in Lebanon, retaliatory missile attacks by Iran, and other retaliatory actions.
Due to OPEC's production cut maintenance, crude oil futures prices surged.
Performance over 5 days...

After the interest rate hike at the July policy decision meeting, concerns about the US economy intensified, and the market became significantly unstable with a sharp decline in the yen and a historical plunge in domestic stock prices. The market continues to be in a nervous state.
In the Bank of Japan's monetary policy decision meeting to be held on the 19th and 20th, it is highly likely that the current operation of monetary policy management will be decided to guide the unsecured call overnight interest rate to around 0.25%. There is a growing view that the Bank of Japan is likely to maintain the current operation of monetary policy management by guiding the unsecured call overnight interest rate to around 0.25%. Regarding the future monetary policy of the Bank of Japan, there is a strong expectation that the current operation of monetary policy management will be decided to guide the unsecured call overnight interest rate to around 0.25%.
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Explanation of general knowledge
① The US CPI exceeded expectations, reducing the possibility of a significant interest rate cut at the September FOMC meeting.
As a result, US interest rates rose and the dollar strengthened.
I feel that a rate cut of 0.25% is risky, but this time it is already factored in.
The US stock market temporarily disliked the retreat of rate cut speculations, but then rose.
With the risk-on movement, the selling pressure on the yen has intensified.
The reason for the trend of a stronger dollar and higher US stocks is the suggestion of a possibility of inflation rekindling in an optimistic mood.
The morning exchange rate on the 12th was 142.28 yen per dollar.
It moved in the direction of a weaker yen from the previous day's 141.38 yen.
Due to the volatility of short-term movements, it is important to remain calm psychologically.
There is a possibility that if Mr. Naoki Tamura, a member of the Bank of Japan, shows a positive attitude towards additional rate hikes in his speech, it could become a catalyst for buying yen.
In recent times, there have been a series of statements from committee members, so it is important to try not to be too influenced by them.
On the 11th, there was a yen buying trend due to the remarks of Commissioner Junko Nakagawa, but after the US CPI, the dollar strengthened and the yen was sold again.
Continued attention is necessary to the US inflation indicators and domestic policy statements in Japan.
The observation of a significant interest rate cut has retreated due to the upward deviation of US CPI, and US interest rates have risen...