Will the yen's one-sided decline come to an end?

Will the yen's one-sided decline come to an end?

21.10.2021

Yesterday, two of the three major U.S. stock indices rose, resulting in a market environment characterized by higher stock prices, lower interest rates, and higher crude oil prices. WTI crude oil rose to $83.30, reaching a seven-year high. Gold rebounded and is trading around $1,785. The yield on the 10-year U.S. Treasury note, which had briefly reached 1.66%, is currently at 1.65%.

In the foreign exchange market, the trend of yen selling has paused, and cross-yen pairs are falling. GBP/JPY fell from a session high of 158.20 to 157.40. AUD/JPY has also dropped from 86.2 to 85.5. Given that this month’s daily candles have been mostly bullish, the decline in cross-yen pairs is a logical development. Meanwhile, among European currency pairs, EUR/GBP has continued to slide this month.

Today’s schedule includes Japanese machine tool orders at 15:00 (Asia time), the Turkish Consumer Confidence Index at 16:00 (Europe time), the UK CBI Business Survey at 19:00, the Turkish Central Bank’s (TCMB) policy rate announcement and statement at 20:00, U.S. initial jobless claims and the Philadelphia Fed Business Outlook Index at 21:30 (U.S. time),at 10:00 PM, remarks by Fed Governor Waller; at 11:00 PM, the U.S. Leading Economic Index and Existing Home Sales; at 11:30 PM, U.S. weekly natural gas inventories; and at 4:00 AM, remarks by RBA Governor Lowe. As we enter the latter half of the week, we will carefully monitor how the U.S. dollar, which has been losing momentum, will perform against other currencies.