In the foreign exchange market in the morning, the yen exchange rate is in the low range of 142 yen to the dollar. In the trading on the 21st, risk-adverse dollar buying developed due to concerns about the spread of the new coronavirus infection in China. The US Federal Open Market Committee (FOMC) will release the minutes on the 23rd.
On the other hand, the US market will be closed on the 23rd due to a national holiday in Japan and the US Thanksgiving Day on the 24th. On the chart, the short-term point is the low of 142.48 yen on the 11th after the appreciation of the yen in response to the US consumer price index (CPI).
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Kentaro Doi, Chief Research Officer of the New York Market Business Unit of Sumitomo Mitsui Trust Bank, said that although US interest rates have risen due to hawkish comments from the US monetary authorities, the dollar/yen has tended slightly weaker and’ r Yen stronger than interest So, he explained, “It was an image that was rewound in the risk-off movement that was triggered by the severity of the corona infection in China.” In the short term, depending on whether the price breaks out of the post-US CPI low, he said, “I think the movement will be somewhat lacking in direction.”
Chinese stocks, Hong Kong stocks and the Chinese yuan all fell in trading on the 21st. China reported its first death from the new coronavirus in months and renewed tightening of restrictions in some areas dampened optimism. European and American stocks also fell, and in the foreign exchange market, the dollar fell against all 10 major currencies due to risk aversion.
On the other hand, in the United States, comments from financial officials continued on the 21st. San Francisco Fed President John Daly said officials need to be aware of the delay before the effects of monetary policy hit the economy as he pushes for further rate hikes to slow inflation. He also reiterated his view that it will reach 10 %. At the FOMC meeting in December, Cleveland Fed President Mester said he had no objection to slowing the pace of rate hikes.
The presidents of Cleveland, St. Louis and Kansas City Fed talks on the 22nd. The minutes of the November FOMC meeting will be released on the 23rd. At the meeting, the BOJ decided to raise interest rates by 75 basis points (bp) for the fourth meeting in a row. Federal Reserve Chairman Jerome Powell said that the policy rate could peak higher than expected, but said the rate increases may decrease in the near future.show recognition.
Mr. Doi said that because of Thanksgiving this week, liquidity in the US market is likely to get weaker, and while paying attention to unexpected movements, US interest rates have stabilized. On the other hand, the interest rate differential makes it easier to sell the yen, and if it breaks out of the lows after the US CPI, it will experience a slightly lower yen price more.
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