On the morning of the 17th, the yen exchange rate on the Tokyo foreign exchange market was in the high 150 yen to dollar range, rising from the previous day. In overseas markets, U.S. interest rates fell due to signs of a slowdown in economic activity, and dollar selling and yen buying became dominant. Due to lackluster stock market movements, the yen was bought with a cross yen, and it appreciated against 16 major currencies across the board. As the weekend approaches, movements led by position adjustments are likely to support the yen.
US Treasuries rose on the 16th (interest rates fell).The number of new unemployment insurance claims and industrial production are weaker than market expectations, leading to Walmart’s cautious view of the future of consumer spending also encouraged bond buying. The yield on two-year U.S. government bonds, which are highly sensitive to the outlook for monetary policy, fell 7 basis points (bp, 1bp = 0.01%) from the previous day to around 4.83%, and the yield on 10-year government bonds fell 10 basis points to around 4.43%.
With important US economic indicators such as employment statistics and the consumer price index coming to an end, and next week’s US Thanksgiving holiday, it is likely that positions will be adjusted due to a lack of clues. The yen has continued to be sold broadly, so a certain amount of buybacks is expected. On the other hand, when the yen appreciates, the drop in volatility will likely lead to carry trades, selling low-interest yen and buying high-interest currencies, and the upside is likely to be limited.