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[17 de Tokio]- The Australian dollar / yen pair is prominent in the forex market in early spring. The Australian dollar / yen pair, which temporarily plunged to around 59.90 yen on March 19 last year due to strong waves of panic from the market that was concerned about the spread of the novel coronavirus, suddenly returned on February 25. of this year. it bought up to about 84.95 yen at a time. The price has risen more than 25 yen and more than 40% in about 11 months.
After that, investors’ holdings were adjusted in anticipation of the end of the fiscal year approaching in Japan, and the momentum of the rise slowed, but held firm at around 82 yen and is still trading at the 84 level. yen.
Looking at the movement of the Australian dollar / yen during this period, it is impressive that even the relatively small parts of the weekly chart were generally correlated with the yen-denominated MSCI KOSPI. In the last year, when countries around the world have been battling against the krona, the characteristics of the Australian dollar / yen, which moves sensibly to the temperature difference of global business sentiment, have become extremely clear.
The “Australian dollar / yen” currency pair, which is a combination of the Australian dollar, which is easy to buy when market sentiment improves, and the Japanese yen, which tends to buy when the market is dark, is based on securities. local. News delivered from within Australia You often see scenes moving wildly in response to the expansion and contraction of business sentiment on a global scale. The super V-shaped recovery shown by the Australian dollar / yen in the worst post-war recession of the krone is arguably a prime example.
<¿El escenario principal es estable a precios altos?>
While the one-sided rise of the Australian dollar against the yen and other major currencies was notable, the Reserve Bank of Australia (RBA) set its target for official overnight interest rates and 3-year government bond yields. 0.25% to 0.1%. In addition to the Reduction to the above, there were a series of oral interventions and official document interventions to curb the Australian dollar while strengthening quantitative easing through the asset purchase program, but the appreciation of the Australian dollar cannot be stopped due to the tailwind of world stock prices. .
Based on this recognition, looking at the Australian dollar / yen exchange rate for the new fiscal year starting next month, in short, it will be an easy-to-understand composition that “depends on the share price”. When looking at the content of the KOSPI, which has served as the leading indicator of the Australian dollar / yen during the krone recession, US stocks account for an overwhelming proportion of almost two-thirds. The key to formulating an Australian dollar / yen trading strategy for the new year is the trend of US stocks.
Consider three scenarios that are expected in the future. First, if US stocks continue to rise higher and continue the journey to renew the highs by more than 15% of the current level, which is in the highest range in history, it is inferred from the relationship between the price movements of Australian stocks and shares. dollar / yen so far So the Aussie dollar / yen cruising altitude is likely to rise from the current 80 yen level to the 90 yen level.
However, the Australian dollar in recent years is no longer a high interest rate currency with “super” interest rates that are many times higher than the interest rate levels of the currencies of the seven major countries ( G7). The Australian dollar used to have a strong interest rate pull that crippled investors’ high alertness, but now that it is no longer a high interest rate currency, it will continue to buy until it chases the high price. . If the stock price does not go up much, the 100 yen level will be difficult. By the way, the author thinks that the probability of performing this scenario is around 25%.
Next, if US stocks stabilize in steady flight at current all-time highs, the Aussie / yen cruising altitude is likely to level off at the 80 yen level, which is not much different from today.
In the stock market, where there are a lot of positive participants, good or bad, there is a strong tendency to look to the future, but the Dow Jones Industrial Average posted a low of $ 18,000 this month, so far. It has already increased by more than 80% in about a year, reaching a maximum of $ 32,000. If it continues to rise at the same rate, it will be calculated to test the $ 59,000 level for this time next year. Unsurprisingly, there is a strong suspicion of a speeding violation and it seems reasonable to assume that the brakes will be applied soon.
If US gross domestic product (GDP) and corporate performance grow steadily going forward due to the spread of the new corona vaccine and the downwind of the Biden administration’s economic measures, wait while enters the historical high price range. / yen, which has caught up with the share price and has risen due to the share price, will also stabilize at a high price. The main scenario that I envision is this pattern, and the probability of realization is around 65%.
Finally, although I am not too reluctant, I would like to refer to the risk scenario of accelerating share prices. In the future, if the rise in US long-term interest rates cannot be stopped, or if the mutant strain of the new type crowns that the vaccine we have developed does not work is rampant and the price of stocks US deep adjustment of 30% or more Next year’s Australian dollar / yen will not stop falling even at the 70 yen level, and may return to the 60 yen level.
However, even in that case, unless the double bottom of the US economy goes deeper than the bottom, it seems unlikely that it will insert down to the 50 yen level. In fact, even in the worst of the corona panic that occurred in March last year, the Australian dollar / yen pair fell to the 59 yen level, and the flight time below 60 yen was only 30 seconds.
In the past, when the share price collapsed around the world, such as “collapse of the IT bubble”, “simultaneous terrorist attacks against the United States”, “Lehman crisis” and so on. He collapsed. However, even if it was brought down by the “worst postwar crown recession” last year, it is not as flashy as it used to be. There must have been a “forgotten hero” who stopped the Australian dollar / yen at the 59 yen level and invited it to rally in the form of a super-V.
As for Australia’s balance of payments, Australia’s balance of payments in recent years has reached a record level due to the reduction in external interest payments and the expansion of the trade surplus. The image of the Australian dollar, which was the currency of a country with a constant current account deficit due to the combination of huge external interest payments and a non-flying trade balance, is becoming an old story.
In response to such changes in the structure of the balance of payments, the flow of AUD purchases that has occurred in the context of the current account surplus in the foreign exchange market in recent years has been a support to solidify the fall of the AUD / JPY during the action. falling prices It is presumed that it has come to play a role.
Going forward, even if US stocks adjust a bit, the risk of going up to the 50 yen level will be small unless it collapses badly. The author considers that the probability of this scenario is the lowest, at most around 10%.
The above is the “three-option scenario” for the Aussie dollar / yen exchange rate for the upcoming fiscal year, which is expected at this time. The whereabouts of the US stock price, which has risen to record highs in anticipation of the global economic normalization of “with the vaccine” and “after the krone”, will determine the fate of the dollar / Australian yen going forward.
Of course, predicting US stocks is not easy. However, the advantage of the Australian dollar / yen is that it can be considered simply as “buy a bargain” for “continued growth in share price”, “counter” for “stability of the share price” and “sale of profitability “per” shares. price rebound. “With respect to entry (buy) and exit (sell) levels when approaching actual trading, while referring to various technical indicators, the trend judgment axis is set to” price connoisseur of stocks “and doesn’t budge. Posture will matter.
* This column was posted on the Reuters Forex Forum. It is written based on the personal opinion of the author.
* Daisaku Ueno is the chief foreign exchange strategist at Mitsubishi UFJ Morgan Stanley Securities. He joined the Nomura Research Institute in 1988. After serving as director of the International Finance Laboratory in 2000, he moved to Nomura Securities in 2004, overseeing currency research as head of the International Financial Research Division and director of the Research Department. of Investments in 2009. In July of the same year he participated in the founding of the Gaitame.com Research Institute and since December he has been the principal investigator and president. He joined Mitsubishi UFJ Morgan Stanley Securities in April 2012 and has held his current position since April 2013. Since 2005, he has ranked first in the exchange category for five consecutive years in the analyst rankings sponsored by Nihon Keizai Shimbun.
* The columnist provides the content, such as news, transaction prices, data and other information in this document, solely for your personal use and not for commercial purposes. The content of this document is not intended to solicit or induce investment activity and is not appropriate for use in making decisions when trading, buying or selling this content. This content does not provide any investment, tax, legal or other advice as investment advice, nor does it make any recommendation with respect to specific individual financial stocks, financial investments or financial products. Use of this document is not a substitute for investment advice from qualified investment professionals. Reuters makes reasonable efforts to ensure the reliability of the Content, but any views or opinions provided by the columnist are the views or analysis of the columnist, not the views or analysis of Reuters.
