Written by: Naoto Ono, Gaitame.com Research Institute
Date of writing: 16:10 on February 16, 2024
USD/JPY recovered to the 150 yen level for the week of February 12th
The US dollar/yen pair rose to 150.882 yen, the highest level since November 16 of last year, on the back of expectations for an early interest rate cut on the back of price data that showed a lull in US inflation. However, growth was suppressed from this level due to verbal intervention by Finance Minister Suzuki and Treasurer Kanda, as well as unexpectedly weak US consumption data, and the US dollar/yen pair was pushed back to around 149 yen at one point. (Each rate level is as of the time of writing)
FX live commentary, persistent yen depreciation for 24 years (February 15, 2024)
*Market trends are also explained on a program broadcast by Gaitame.com Research Institute’s TEAM Harrons.
Difficult to determine direction due to weak US dollar and weak yen
Regarding inflation trends in the United States, while the prices of goods fell by 0.3%, the prices of services rose by 0.7%, making it clear that service prices are rising faster than the decline in prices of goods, raising concerns about a resurgence of inflation. I am. On the other hand, consumer spending in the United States is starting to show a lull, and concerns about the growth of the U.S. economy remain. Under these circumstances, what kind of communication the authorities will communicate with the market through the FOMC minutes and other means will likely be a focus for next week. Personally, I believe that the authorities will not completely nip the possibility of a March interest rate cut in the bud, and I think that the US dollar’s upside will be suppressed as a reaction to the recent rise.
On the other hand, in Japan, a survey of small and medium-sized enterprises conducted by the Japan Chamber of Commerce and Industry found that 61.3% of small and medium-sized enterprises plan to raise wages this year, an increase from last year. It shows that there is still not enough movement to pass on the benefits. GDP for the October-December quarter of last year was also unexpectedly negative, and it would be premature to think that the “second force” (virtuous cycle of wages and prices) proposed by Bank of Japan Governor Ueda has the upper hand, and that the Bank of Japan is aiming for It seems that there is still a long way to go before negative interest rates are lifted. It looks like the yen’s upside will also be suppressed. In the end, I think the US dollar/yen pair will trade against each other at their recent highs due to a combination of weaker US dollar and weaker yen.
Next week’s USD/JPY drop to mid-148 yen is expected
The US dollar/yen pair continues to trend upwards, and the current trend seems to be maintaining strength. However, as the price is likely to undergo correction in the short term as a reaction to the recent rapid rise, I think the price will consolidate and retest the 151 yen level. In the downward direction, it seems safe to assume that the price will adjust to around 148.53 yen (at the time of writing), where the 21-day line will move, and if the price stops around this point, I would like to aim for an upside price and buy up.
[USD/JPY chart daily]
Source: Gaitame.com “Gaikan Next Neo”
Expected range: USD/JPY: 148.000-152.000
Events for the week of 2/19:
2/19 (Monday) 8:50 Japan December machine orders
2/20 (Tue) 24:00 US January Economic Leading Indicator Composite Index
2/21 (Water) 8:50 Japan’s January trade statistics
2/21 (Wed) 28:00 United States Federal Open Market Committee (FOMC) Minutes
2/22 (Thursday) 8:50 Japan Status of foreign and domestic securities sales contracts, etc.
2/22 (Thursday) 22:30 Number of new unemployment insurance applications in the United States
2/22 (Thu) 23:45 US February Manufacturing Purchasing Managers Index (PMI, preliminary figures)
2/22 (Thursday) 23:45 US February Service Sector Purchasing Managers Index (PMI, preliminary figures)
2/22 (Thu) 23:45 US February Purchasing Managers Index (PMI, preliminary figures)
2/22 (Thu) 24:00 US January used home sales
2/22 (Thursday) 24:00 U.S. Federal Reserve Vice Chairman Jefferson speaks
2/22 (Thursday) 27:00 U.S. Federal Reserve Board Director Bowman, remarks
2/22 (Thursday) 28:00 U.S. Federal Reserve Bank of Philadelphia President Harker makes a statement
2/23 (Friday) 7:00 U.S. Federal Reserve Board Director Cook speaks
2/23 (Friday) 7:00 US Federal Reserve Bank of Minneapolis President Kashkari speaks
2/23 (Fri) 9:35 U.S. Federal Reserve Board Director Waller speaks
One word comment
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2024-02-17 01:00:00
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