Is the Correction in the Yen’s Decline a Turning Point?
26.03.2021
- Rising stock prices, a strong U.S. dollar, and high interest rates
- The Dollar Index rose to 92.8
Yesterday, the market rebounded from the risk-off sentiment that had prevailed earlier in the week, with stocks, the U.S. dollar, and interest rates all rising; the Dow Jones Industrial Average closed at $32,619, up $200 from the previous day.The fear index (VIX) also fell below 20 again to 19.8, signaling a return to calm. Another positive factor was yesterday’s report on U.S. initial jobless claims, which fell by about 97,000 from the previous week to 684,000—the lowest level since the COVID-19 crisis began.
In the foreign exchange market, Oceania currencies—which had recently fallen sharply—have rebounded, and the Australian dollar is trending higher against both the yen and the U.S. dollar. The AUD/JPY pair is currently trading around 83.1, while the AUD/USD pair stands at 0.761.
Today, at 16:00: UK retail sales,Turkey’s Economic Sentiment Index and Capacity Utilization Rate at 4:00 PM, the German IFO Business Climate Index at 6:00 PM, remarks by UK MPC Member Sanders at 9:00 PM, U.S. Personal Income, the U.S. Core PCE Deflator, and U.S. Wholesale Inventories (flash estimate) at 9:30 PM,at 11:00 PM, the U.S. University of Michigan Consumer Sentiment Index (final reading), and at 1:45 AM, remarks by MPC member Tenreiro of the UK. We will carefully assess whether the yen’s appreciation trend will reverse and shift back to a depreciation trend.
Author: Keisuke Sakurai
