European and American market opening comments
“The dollar/yen is sluggish, or has settled at the 155 yen level, but we are wary of Japan’s foreign exchange intervention.”
In the European and American foreign exchange markets on the 25th, the dollar and yen are expected to show sluggish growth. If the US gross domestic product (GDP) exceeds expectations, the dollar will aim for 156 yen. However, all eyes will be on tomorrow’s inflation indicators, and further increases will likely be restrained due to concerns about Japan’s foreign exchange intervention.
Although US durable goods orders announced on the 25th were strong, they did not provide strong support for tightening US monetary policy, and the effects of high US interest rates and the dollar were limited. However, when the dollar/yen pair broke through the 155 yen level, which had been acting as an upper resistance line, options-related buying intensified and the dollar/yen pair rose to the 155.30 yen level. The euro and yen also strengthened, hitting the 166 yen level for the first time since 2008. Today, the Asian market continued this trend, with the dollar/yen pair testing an upward trend at the 155 yen level. After this, overseas markets will be based on US economic indicators. This evening’s preliminary figures for gross domestic product (GDP) for the January-March period are expected to slow at an annual rate compared to the previous quarter, which is likely to weaken the tightening policy of the US Federal Reserve (Fed). Additionally, tomorrow’s US core PCE price index is expected to remain high, but we will continue to monitor the situation. On the other hand, the Bank of Japan’s financial normalization is not expected for the time being, making it easy for the yen to sell, while Japan’s wariness about foreign exchange intervention will become even stronger, which could limit the dollar’s upside.
Analysis by currency
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