FX/Forex “Dollar/JPY exceeds 155 yen; intervention is expected to be triggered tomorrow after the Bank of Japan’s announcement” Gaitame.com Today April 25, 2024 issue – Gaitame.com Money Education Channel

We will provide an easy-to-understand explanation of the price movements of the previous business day for major currency pairs ($/yen, euro/yen, Australian dollar/yen, pound/yen) and provide future outlook.

Creation date and time: April 25, 2024 8:20
Written and supervised by: Takuya Kanda, Research Manager, Gaitame.com Research Institute, Inc.

table of contents

▼Exchange rate on the 24th (Wednesday)
(1): Expectations for RBA interest rate cuts within this year recede
(2): IFO Director: “German economy is stable”
(3): US durable goods orders exceed expectations
(4): Dollar/yen hits new level for the first time in 34 years

▼24th (Wednesday) Stock, Bond, and Commodity Markets

▼Foreign exchange order information/ ▼Today’s outlook/ ▼Outlook for the dollar/yen: A significant yen depreciation is unlikely ahead of the Bank of Japan meeting/ ▼Economic indicators of interest/ ▼Notable events

Exchange rate on the 24th (Wednesday)

Period: 6:10 a.m. on the 24th (Wednesday) to 5:55 a.m. on the 25th (Thursday) *Chart is 30 minutes (Japan time display) Source: Gaitame.com

(1): Reversal of expectations for RBA interest rate cuts within this year

Australia’s consumer price index (CPI) for the January-March period was +1.0% from the previous quarter and +3.6% from the previous year, exceeding market expectations (+0.8%, +3.5%). The trimmed average, which corresponds to core CPI, was +4.0% year-on-year, which was slower than the October-December quarter (+4.2%), but exceeded market expectations (+3.8%). Expectations that the Reserve Bank of Australia (RBA) would cut interest rates by the end of this year have faded as the persistence of services inflation has become clearer. The Australian dollar/yen pair rose to the 101 yen level for the first time since December 2014 as Australian long-term interest rates rose.

(2): IFO Director: “German economy is stable”

Germany’s April IFO Business Confidence Index rose to 89.4, exceeding market expectations (88.8) and rising to the highest level in 11 months since May 2023. The expectation index, which indicates the future outlook, rose to 89.9, the highest level in a year. The head of the IFO expressed the view that “Germany’s economy is stable, and the service industry is doing particularly well.”

(3): US durable goods orders exceed expectations

US orders for durable goods in March increased 2.6% from the previous month, exceeding market expectations (+2.5%). Excluding transportation equipment, which is subject to large fluctuations, orders increased by 0.2% from the previous month, which was as expected, a small increase.

(4): Dollar/yen hits new level for the first time in 34 years

The dollar/yen pair rose to around 155.37 yen, the highest level in 34 years since June 1990. The rally gained momentum as the price broke above 155.00 yen, where the setting of a knockout option was observed. The cross yen also rose amid strong gains in US stocks, especially high-tech stocks. Furthermore, the euro/yen pair rose to around 164.23 yen just before the market close, the highest since August 2008, and the pound/yen pair also rose to around 193.64 yen, the highest since August 2015. .

Stock, bond, and commodity markets on Wednesday the 24th

[Information provided by Gaitame.com]

• * “Foreign exchange order information” refers to a tool that allows you to check the limit price and stop order status of customers trading on Gaitame.com’s “Gaikan Next Neo”.
• *In addition, by selecting “Trade analysis” on the advanced chart (free), order information can be displayed on the chart.
• *Please note that this foreign exchange order information is for informational purposes only, and investors should make their own final investment decisions.

Popular currency pairs Today’s expected range

Outlook for the dollar/yen: A significant yen depreciation is unlikely ahead of the Bank of Japan meeting

Yesterday’s dollar/yen pair rose to the 155 yen level for the first time in 34 years. While the yen continued to be sold due to the expectation that the Bank of Japan would maintain an accommodative financial environment for the time being, there was also dollar buying in response to the rise in US long-term interest rates, causing the yen to surpass the psychological milestone of 155.00 yen in overseas markets. At one point, the price rose to around 155.37 yen, the highest since June 1990.
On the 23rd, Finance Minister Suzuki restrained market movements by saying, “It can be seen that the environment is set” for intervention in buying the yen, but the currency broke above 155.00 yen, which was seen as the government’s and Bank of Japan’s defense line. However, no action was taken. There is a possibility that the authorities will take a more restrained tone in the Tokyo market today, but it is no longer possible to prevent the yen from depreciating through lip service. In fact, if there is a widespread view that the Japanese authorities’ intervention is only lip service and is reluctant to use live ammunition, the yen could depreciate even further. However, some in the market are predicting a repeat of September 2022, when the Bank of Japan intervened to buy the yen immediately after deciding to maintain the status quo in monetary policy. Ahead of the Bank of Japan’s policy announcement tomorrow, it seems unlikely that the yen will depreciate significantly today. Of course, unless there is intervention, the likelihood of the yen appreciating is even slimmer.
In addition, preliminary figures for the U.S. gross domestic product (GDP) for the January-March period will be announced today in the New York market. This is expected to slow down from the October-December quarter, which grew at a high annual rate of +3.4% year-on-quarter, but is expected to maintain a steady growth of +2.5% on the back of strong personal consumption. I would also like to pay attention to the movement of the dollar in response to the GDP results.

Economic indicator of interest: US GDP

Notable event: ECB President Lagarde’s statement

*Time is displayed in Japan time.
*”Notable economic indicators” and “Notable events” are displayed as “◎”, “○”, or “No mark” in descending order of attention.
*Announcement time may change without notice. In addition, although the schedule list is compiled based on information that is believed to be highly reliable, we cannot guarantee the accuracy of the contents, so please be aware of this in advance.