On the 27th, the yen exchange rate in the Tokyo foreign exchange market was in the mid-149 yen range to the dollar, remaining flat from the previous weekend’s Tokyo market. The dollar depreciated as the employment index in the U.S. Purchasing Managers’ Index (PMI) released on the 24th began to contract. On the other hand, there is strong yen selling pressure due to the cross yen, weighing on the yen against the dollar. The yen is likely to be in trouble in the Tokyo market as there is a risk of buybacks to adjust holdings towards the end of the year.
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Yukio Ishizuki, senior foreign exchange strategist at Daiwa Securities, said he expects the market to remain on a wait-and-see approach until tonight, when investors in the U.S. market return in earnest after the Thanksgiving holiday. He pointed out, “As the dollar is generally weak, even if the cross yen is in the direction of a slight yen depreciation, the dollar-yen pair is unlikely to depreciate.” The dollar/yen pair in the Tokyo market is hovering around the mid-149 yen level, and he said, “It seems unlikely that the dollar will try to rise above 150 yen.”
In the US PMI statistics for November, the composite index remained unchanged from the previous month at 50.7, exceeding 50, which is the dividing line between expansion and contraction in economic activity, while the employment index fell to 49.7, falling into contraction territory for the first time since mid-2020.
US Composite PMI employment index shrinks for the first time since mid-2020 – S&P Global
Last week’s yen exchange rate hit 147.15 yen to the dollar, the highest since September 14th, on the 21st, and then fell back as the dollar was bought back, but remains below 150 yen. Amid mixed US economic indicators, the dollar’s topside is heavy. While cross-yen currencies such as the euro and the yen are currently performing well, there is also the view that the amount of yen-selling positions to be adjusted will increase towards the end of the year.This week, the Bank of Japan’s deliberative committee members are scheduled to give speeches, and their comments aimed at normalizing monetary policy will be attracting attention.
On the 24th, the yield on the US 10-year Treasury note closed at around 4.47%, 6 basis points (bp, 1bp = 0.01%) higher than the previous day. This followed the flow of bond sales during the same day in Asia and Europe. The U.S. bond market was in shortened trading after the Thanksgiving holiday.
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2023-11-26 22:43:00
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