Dollar-yen rebounded to around ¥157 in the New York market after temporarily falling, and Tokyo stocks may decline enough to prompt risk-aversion yen buying. The market is expected to become more active this week ahead of policy meetings by the FOMC, ECB and Bank of Japan.
In the New York market on the 23rd, dollar-yen temporarily fell to around ¥156.32 in response to declines in European stocks and US-Japan equity futures, but recovered to around ¥157.08 as long-term US yields rose. Euro-dollar returned to the lower ¥1.11 range as long-term US yields rose and the final consumer sentiment index reading exceeded expectations.
In Tokyo, the market is expected to remain focused on headlines concerning the Middle East, while growing downside concerns in the Tokyo stock market are likely to intensify risk-aversion yen-buying pressure. Concerns over the US midterm election results and trends in AI investment are also being watched as market factors.
If the decline in New York stocks continues amid concerns about a “blue wave” in the US presidential election, stock market trends could affect regulations on the construction of AI-related data centers. Concerns over French debt are also contributing to euro selling and yen buying.
The FOMC, ECB Governing Council and Bank of Japan meetings are scheduled for this week, and policy rates are expected to remain unchanged, although expectations of a rate hike at the December meetings may strengthen. Dollar selling and yen buying are expected to emerge at times, with the market mindful of the lower boundary of the cloud.
IMM non-commercial yen positions show increased yen buying on a week-on-week basis, with net long positions rising. Speculators are maintaining yen-buying positions aimed at restraining yen depreciation.