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The yen and the dollar are bought on the Tokyo forex market. Risk aversion has intensified due to the sharp rise in long-term interest rates in the United States and the sharp fall in equity prices the day before. After the dollar / yen reached its highest level since September last year, the dollar / yen sold at the end of the month and the dollar / yen temporarily fell below 106 yen.
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View of market participants
Junichi Ishikawa, Senior Currency Strategist, IG Securities
- No matter how much the Chairman of the Federal Reserve Board of Governors (FRB), Powell, says that monetary easing will continue, US interest rates will not fall. In the future, if the United States applies fiscal policy, naturally anxiety about whether the current rise in interest rates will be suppressed will work.
- If interest rates continue to skyrocket, the appreciation of the dollar risk aversion and the pressure of the appreciation of the yen will increase.
Akira Moroga, Chief Market Strategist at Aozora Bank
- Yesterday, the US dollar was bought due to the sharp rise in US interest rates, but the US interest rate fell a bit in Tokyo time and Japanese stocks also fell sharply, which is the stuff to buy yen.
- Although the interest rate of the yen has risen, it is modest, I think the BOJ will also tighten control of the policy next month, so I think it will calm down.
- The dollar / yen pair is right around the corner on the weekly Ichimoku Kinko Hyo, and half of the high and low prices of March last year technically stop at around 106.50 yen. On the other hand, even if goes down, it will support around 105.50 yen on the 200 line.
Yukio Ishizuki, Senior Currency Strategist, Daiwa Securities
- The movement of US long-term interest rates has become so volatile that the market is unlikely to focus on selling dollars as before.
- Since today is the end of the month, it is easily affected by the movement of real demand in Japan time. After that, whether the London arrangement will be turbulent or not, but overall the dollar may be one more movement. strong.
background
- In the New York market on the 25th, the yield on US 10-year bonds temporarily rose to the level of 1.6%, the highest level in a year. About 1.48% in Asian time trading on the 26th
- US Federal Reserve Bank of St. Louis Governor Bullard said on the 25th that the recent yield on US 10-year bonds is “appropriate”.Observation: The Governor of the Federal Reserve Bank of the United States of Atlanta, Bostic, also commented that he was “not concerned” about the increase in US bond yields.
- The impact of the sharp rise in US interest rates will extend to the Asian market on the 26th
- The yield on Japanese 10-year bonds rises to 0.175%, the highest level since the introduction of negative interest rates by the Bank of Japan in January 2016.
- Reserve Bank of Australia (Central Bank) Announces the Purchase of 3-Year Bonds Worth A $ 3 Billion as a Yield Restriction
- Following the slide in US stocks the day before, Japanese stocks tumbled and the Nikkei stock average closed at 1202 yen lower than the day before. Chinese stocks are also significantly cheaper.
