2023-08-30 22:13:00
On the morning of the 31st, the dollar/yen exchange rate in the Tokyo foreign exchange market devalued to just around 146 yen to the dollar. The weaker-than-expected economic indicators have reduced expectations for an interest rate hike by the end of the year, putting pressure on the dollar to sell. On the other hand, demand for yen-selling against the backdrop of the trend of risk appetite due to high stock prices and the difference in interest rates between Japan and the US is likely to underpin the market.
As of 8:26 a.m., the dollar/yen was 146.02 yen, down 0.2% from the previous day to 145.56 yen in overseas markets on the 30th, the weakest dollar and the strongest yen since the 24th. The euro/yen was 0.1%. A cheap 1 euro = 159.61 yen.Temporarily rose to 159.76 yen in overseas time, the highest level since August 2008.
Yujiro Goto, chief currency strategist at Nomura Securities, said while the dollar was generally weak, there was no growing concern that the US economy would collapse. Although it is a stance to ascertain the US employment statistics tomorrow, “Risk sentiment is improving due to rising US stock prices and declining volatility due to declining expectations for interest rate hikes. The pressure is strong,” he said.
The US 10-year bond yield on the 30th was temporarily around 4.08%, and the US 2-year yield was around 4.83%, both of which were the lowest levels since the 11th. Lower-than-expected employment data and downward revisions to gross domestic product (GDP) and personal consumption expenditure (PCE) core price indexes weighed on the economy. In the interest rate swap market, the rate hike probability of 0.25% as of November has fallen to less than 50%.
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On the other hand, yen-selling demand remains strong against the backdrop of the trend of risk appetite, which has been favorably received by receding expectations of US interest rate hikes, and the difference in interest rates between Japan and the US. The US dollar/yen exchange rate fell to the 147 yen level for the first time since November last year on the 29th, but its topside became heavy, but it is still holding steady at around 146 yen. Mr. Goto said, “The authorities haven’t made any statements to restrain the yen’s depreciation, and the 147-yen level doesn’t seem to raise concerns about market intervention.”
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