Is the correction in the yen 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 VIX (fear index) also fell below 20 again to 19.8, signaling a return to calm. Another positive factor was the U.S. initial jobless claims data released yesterday, which showed a decrease of 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, with the Australian dollar rising 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’s schedule includes UK retail sales and Turkey’s economic sentiment index and capacity utilization at 4:00 PM, Germany’s IFO Business Climate Index at 6:00 PM, remarks by UK MPC member Saunders at 9:00 PM, US personal income, the US core PCE deflator, and US wholesale inventories (flash estimate) at 9:30 PM,at 11:00 PM, the US University of Michigan Consumer Sentiment Index (final reading), and at 1:45 AM, remarks by UK MPC member Tenreiro. We will carefully assess whether the yen’s appreciation trend will reverse and shift back to a depreciation trend.
Author: Keisuke Sakurai
