[Tokyo 22nd Archyde.com]–The dollar / yen pair at 3:00 pm on the 22nd remained at 120.31 / 33 yen, a stronger dollar / weaker yen than the end of the New York market (119.47 / 48 yen) on the previous day. There is. US interest rates have risen and the dollar has strengthened further following yesterday’s hawkish remarks by the chairman of the Federal Reserve Board (FRB). The dollar temporarily rose to around 120.46 yen and remained in the 120 yen range therefollowing. It was traded at the highest price since February 2, 2016.
The views of market participants are as follows.
● US dollar 50bp rate hike expectations are rising, is the immediate dollar high of 123 yen level?
The impact of yesterday’s Federal Reserve Chairman’s speech was significant, suggesting that action must be taken to curb inflation, forcing us to anticipate an accelerated pace of rate hikes. .. The content of the lecture also confirmed that he was open to raising interest rates by 50 basis points (bp) if necessary.
The market thought that the basic route was to raise the interest rate by 25 basis points (bp) every time at the US Federal Open Market Committee (FOMC) within the year, but the interest rate will be raised by 50 bp at the FOMC around May or June. Expectations have risen. As a result, US interest rates rose and the dollar buying pressure increased.
The dollar / yen pair is expected to remain in the range of around 120 yen toward the April-June quarter. However, at the stage of trying 120 yen this time, it seems that a sense of accomplishment will be conscious, and it will be difficult for the dollar to strengthen steadily.
In addition, the dollar may hit a high price of 122 yen to 123 yen because the US interest rate hike has been considerably advanced, but it is difficult to try the 125 yen level.
● Yen depreciation led by dollar buying, will not reach 125 yen?
It seems that the press conference by Haruhiko Kuroda, the governor of the Bank of Japan, on the 18th of the previous week was accepted as accepting the depreciation of the yen, but basically the dollar / yen pair is rising due to the strengthening of dollar buying led by foreigners. Demand for dollar buying by long-term investors and dollar buying for the purpose of hedging the risk of falling US stocks are increasing, and it seems that the yen is preferred as the currency to be sold. Until now, the euro was also the target of sales, but as the ECB (European Central Bank) steers toward the hawkish side, the yen will be sold intensively as the target currency.
Looking at the recent correlation between the US 10-year government bond interest rate and the dollar / yen, a 1% rise in the US interest rate leads to a depreciation of the yen by 10 yen. Looking at US 30-year bonds, there is room for a further 0.3% increase in US 10-year bonds. The dollar / yen pair was priced at 120 yen on the 22nd, the first time since February 2016. In the next three months, it is possible that the price will rise by another 3 yen, but it is not expected to reach 125 yen.
● Differences in monetary policy between Japan and the United States are clearly overlapped with yen selling materials
Originally, the difference in monetary policy between Japan and the United States was conscious, but following the remarks made at the meeting of the governor of the Bank of Japan, Haruhiko Kuroda last weekend, and the remarks of the chairman of the Federal Reserve Board (FRB) yesterday, It is an impression that yen sales are progressing due to the difference in US policy. In particular, at the press conference of Governor Kuroda, the fact that no negative remarks regarding the depreciation of the yen came out was highlighted as a factor in selling the yen. While Japan’s current account deficit was being recognized as a material for selling yen due to soaring resource prices, the dollar’s appreciation / yen depreciation accelerated due to the remarks of the top central banks in Japan and the United States.
In addition, the euro selling started from the end of February due to the worsening situation in Ukraine, but the euro selling has stopped as the ceasefire negotiations continue. The change in the currency to be sold from the euro to the yen may have led to the depreciation of the dollar / yen and the cross yen.
The next high of the dollar / yen is conscious of 121.68 yen, which was set in January 2016. Basically, the dollar / yen pair is expected to continue to try upwards, but there are concerns regarding a slowdown in the US economy as the US accelerates monetary tightening. If concerns regarding the future of the US economy increase, or if the Japanese government and the Bank of Japan restrain the depreciation of the yen, the current depreciation of the yen may stop. However, it is difficult to predict where the upside will be suppressed, and the high volatility situation is likely to continue.
