Written by: Naoto Ono, Gaitame.com Research Institute
table of contents
Date of writing: 13:10 on February 9, 2024
How far can you digest the new triangle balance and aim for 152 yen?
USD/JPY rises for week of February 5th
The US dollar/yen pair at times fell as low as 147.618 yen as US interest rates fell as concerns about the US commercial real estate market were felt. However, when Bank of Japan Deputy Governor Uchida announced a gradual exit from easing, saying, “Even if negative interest rates are lifted, we are not considering a path where the tightening stance accelerates,” the US dollar/yen pair rose to 149.480 yen. I expanded it. (Each rate level is as of the time of writing)
FX live commentary, 1 dollar 160 yen with new NISA (February 8, 2024)
*Market trends are also explained on a program broadcast by Gaitame.com Research Institute’s TEAM Harrons.
Keep an eye on how logistics disruption will affect inflation
Several US Federal Reserve officials have expressed the view that, “While it will depend on the data, there is little need to rush to cut interest rates.” Within the Fed, it is not realistic to cut interest rates in March, and the market is predicting the number of rate cuts this year. It seems that there has been no major change in the opinion that the number will remain at 2 or 3 times, which is lower than the 6 times. All eyes will be on whether the January US consumer price index (CPI) and retail sales results to be announced next week will support the authorities’ view.
Both the overall and core CPI are expected to decline from the previous month (overall: 3.4% → 2.9% in December, core 3.9% → 3.7%). However, gasoline prices in the United States showed signs of rebounding in January, and transportation costs rose due to ships being forced to avoid passage through the Suez Canal due to attacks by armed groups in the Red Sea, and traffic restrictions in the Panama Canal due to drought. We must also not forget that there are factors that can prevent inflation from slowing down. If the pace of slowdown in inflation remains limited, contrary to expectations, the US dollar/yen pair is likely to become more resilient as the timing of the US interest rate cut is expected to be delayed. In addition, expectations for increased consumption in the US due to a significant rise in hourly wages are likely to increase speculation about the timing of interest rate cuts, so keep an eye on the next day’s CPI retail sales results.
However, if the turmoil in the commercial real estate market, which is currently viewed as a localized problem, spreads, there is a risk that the optimistic view of the U.S. economy will collapse and stock prices and the yen appreciate further. will not be missed. Furthermore, if the US dollar/yen exchange rate exceeds 150 yen, the government’s intervention to buy the yen by the Bank of Japan is likely to attract more attention, and related statements to prevent the yen’s depreciation and related reports will also need to be watched.
Can USD/JPY conquer the next ascending triangle?
Currently, the price has broken through the resistance line of the bullish ascending triangle created by the support line starting from the December 28th low (140.255 yen) and the resistance line of 148.891 yen, and has recovered to the 149 yen level. . Next, we are starting to see a breakout of the bullish triangular hold created by the support line from last year’s low (127.225 yen) and the resistance line at the 2022 high of 151.942 yen. However, from the current level, there is some distance to the range stance line, so rather than trying to capture the top price all at once, I think it will be more of a gradual approach. On the downside, if it falls below the 100-day moving average (147.585 yen: at the time of writing), I would like to withdraw.
[USD/JPY chart daily]
Source: Gaitame.com “Gaikan Next Neo”
Expected range: USD/JPY: 147.500-151.500
Events for the week of 2/12:
2/12 (Monday) 26:00 U.S. Federal Reserve Bank of Richmond President Berkin speaks
2/12 (Monday) 27:00 U.S. Federal Reserve Bank of Minneapolis President Kashkari speaks
2/13 (Tue) 8:50 Japan January domestic corporate goods price index
2/13 (Fire) 22:30 US Consumer Price Index (CPI) in January
2/14 (Wednesday) 23:30 U.S. Chicago Fed President Goolsby speaks
2/15 (Thursday) 6:00 U.S. Federal Reserve Vice Chairman William Barr speaks
2/15 (Thu) 8:50 Japan October-December quarter real gross domestic product (GDP, preliminary figures)
2/15 (Thu) 22:30 US February New York Fed Manufacturing Industry Index
2/15 (Thu) 22:30 US January retail sales
2/15 (Thursday) 22:30 Number of new unemployment insurance applications in the United States
2/15 (Thu) 24:00 US December corporate inventory
2/15(Wood) 24:00 US NAHB Housing Market Index in February
2/16 (Friday) 8:50 Japan Status of foreign and domestic securities sales contracts, etc. (external medium- and long-term bonds)
2/16 (Friday) 9:00 U.S. Federal Reserve Bank of Atlanta President Bostic speaks
2/16 (Friday) 13:30 Japan December Tertiary Industry Activity Index
2/16 (Fri) 22:30 US January Wholesale Price Index (PPI)
2/16 (Fri) 22:30 US January housing starts
2/16 (Fri) 22:30 US January construction permits
2/16 (Friday) 24:00 U.S. February University of Michigan Consumer Attitude Index, preliminary figures
2/16 (Friday) 26:10 U.S. President Daley, President of the San Francisco Federal Reserve, speaks
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2024-02-10 01:00:00
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