On the 4th, the yen exchange rate in the Tokyo foreign exchange market was in the high 151 yen range to the dollar, remaining almost unchanged from the evening of the previous day. Overseas time on the 3rd, the price approached the psychological milestone of 152 yen due to the increase in employment in the United States, but it was reluctant to lower as business confidence in non-manufacturing industries was lower than market expectations. While the yen will be supported by a sense of caution against intervention ahead of the turning point, expectations for the dollar’s strength are likely to weigh on it.
- As of 8:35 a.m., the yen was trading at 151.60 yen against the dollar (151.68 yen as of 5 p.m. on the 3rd)
- On the 3rd, the price reached a high of 151.44 yen, and at one point the price was 151.95 yen, approaching the lowest price in about 34 years (151.97 yen) hit on March 27th.
Keiichi Iguchi, senior strategist at Resona Holdings’ market planning department, believes that today’s yen exchange rate will continue to have a heavy topside. Since last weekend, U.S. price statistics and employment indicators have generally been on the rise, so there is a “trend to brace for a strong employment clock.” “I have strong expectations for the dollar.”
On the 3rd, US long-term interest rates rose as the ADP private sector employment figure for March exceeded market expectations, but the Institute for Supply Management (ISM) non-manufacturing business conditions index, which was subsequently released, declined for the second consecutive month. It has returned to a flat level. In his speech, Federal Reserve Chairman Jerome Powell expressed caution about lowering interest rates. In the interest rate swap market, there were no major changes in the probability of interest rate cuts in June or the number of interest rate cuts this year, and the dollar and yen moved in line with interest rate movements.
The Bank of Japan’s branch manager meeting will be held today, and the regional economic report (Sakura Report) will be released. If Governor Kazuo Ueda, who also emphasizes qualitative hearing information, makes positive statements about further interest rate hikes, the yen is likely to be bought.
Resona HD’s Mr. Iguchi said, “I think it’s significant that the Bank of Japan’s supply-demand gap has become positive, but it’s the U.S. side that moves the dollar and yen without reacting,” adding that the yen has declined in response to the branch managers’ meeting and the Sakura report. He said that the move is likely to be temporary, driven by algo trading.
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2024-04-03 22:43:00
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