Will the already weak Japanese yen lose further ground? Should investors be wary of upside potential in cross-yen pairs?

Will the already weak Japanese yen lose further ground? Should investors be wary of upside potential in cross-yen pairs?

09.11.2023

In yesterday’s U.S. currency trading, despite remarks by Federal Reserve Chair Powell, he made no mention of monetary policy, and the U.S. dollar rose slightly against the yen. The USD/JPY pair rose from 150.288 to 151.060, marking a gradual climb along the 20-period moving average on the hourly chart.With yesterday’s rise, USD/JPY has shifted from the key 150-yen level to the 151-yen range, indicating that upward momentum is strengthening. We will be watching to see if the dollar continues to rise during U.S. trading hours.

European currencies rose against the yen as Germany’s final October Consumer Price Index (CPI) report, released yesterday, showed a year-over-year increase of 3.8%, unchanged from the previous month.Amid a general rise in cross-yen pairs, the euro/yen climbed from 160.441 to 161.730, significantly surpassing its previous high. With the Japanese yen weakening, it remains to be seen whether the euro will continue to strengthen against the yen, and we need to carefully assess the direction of the market.

Today’s schedule includes Swedish house prices at 4:00 PM, remarks by MPC member Pill at 5:30 PM, the ECB’s monthly report at 6:00 PM, South African mining production at 6:30 PM, South African manufacturing production at 8:00 PM, and Turkey’s total foreign exchange reserves at 8:30 PM,9:00 PM: Mexico Consumer Price Index, 10:30 PM: US Initial Jobless Claims, 11:30 PM: US remarks by Bostic, President of the Atlanta Fed, 2:30 AM: EU remarks by ECB President Lagarde, 4:00 AM: US remarks by Fed Chair Powell, and Mexico’s policy rate decision.With the Japanese yen already weakening, we need to watch for the upside potential in cross-yen pairs to see if the yen will lose further momentum.