Today’s exchange 2024/03/07 (Thu) 20:27
Buying of yen, speculation of early lifting of negative interest rate by Bank of Japan spreads, dollar-yen falls to 147 yen level = London foreign exchange overview
The London market is dominated by yen buying. The background to this is the sudden spread of speculation that the Bank of Japan will soon lift negative interest rates. With the spring labor union demanding higher wages than last year, the degree of decline in real wages is beginning to ease. Bank of Japan councilor Takada the other day and Bank of Japan councilor Nakagawa today have expressed positive opinions about ending negative interest rates. It was also reported that government officials were in favor of allowing negative interest rates to be lifted in March-April. After falling from the low 149 yen range to the low 148 yen range in the Tokyo market, the price widened to a low of around 147.77 in the early part of London. This is the first time in about a month since February 7th that the dollar has weakened and the yen has strengthened. Returns after that are also limited. The cross yen also fell across the board, with the euro yen at just around 161 yen and the pound yen at around 188.25. In addition, the euro’s topside has been heavy ahead of the ECB’s monetary policy announcement. Selling against the pound has become noticeable. The prevailing expectation is that inflation forecasts will be lowered at the ECB Governing Council meeting. All eyes are on whether this will serve as a stepping stone for future interest rate cuts.
The dollar/yen exchange rate was in the high 147 yen range. The price hit a high of around 149.38 in the morning in Tokyo, and has been declining almost in one direction. In early London, the price widened to a low around 147.77, and the rebound thereafter has been slow. This is the first strong yen and weak dollar in about a month. Expectations for an early lifting of negative interest rates appear to be growing in the market, with a series of high-ranking Bank of Japan officials and government officials.
EURUSD is trading around 1.09. The yen is leading the market, and the dollar is trading in a range of 1.0888 to 1.0907. The euro yen has fallen along with the dollar yen. It peaked at around 162.85 in the Tokyo morning and fell to around 161.00 by London time. The euro is also weak against the pound. There are growing speculations that the ECB’s Governing Council will lower its inflation forecast.
The pound-dollar exchange rate was trading in the mid-1.27 range. It has broken out of the turmoil in the low 1.27 range and is increasing to a high of 1.2760. On the other hand, the pound yen was weak due to yen buying. It hit a high around 190.23 in the early morning hours of Tokyo, and widened to a low around 188.25 in the early hours of London. After that, the price declined to the low 188 yen level. The euro pound fell. It has been pushed down from around 0.8560 to around 0.8540. In addition to a slightly weaker euro, the pound seems to have been supported by the UK’s DMP one-year inflation forecast of 3.3%, higher than the market forecast of 3.0%.
minkabu PRESS Editorial Department Hideaki Matsuki
Author: MINKABU PRESS
This is an editorial department that writes articles on market information and financial products such as stocks and FX, mainly for the asset formation information media “Minkabu” and the investor information media “Kabutan.” We provide a wide range of news and columns useful for investing, as well as content for beginners.