The yen is set to post its biggest weekly decline since October last year as traders expect the Liberal Democratic Party led by Prime Minister Sanae Takaichi to secure a decisive victory in the election this weekend.
The Japanese yen has weakened for four consecutive trading days and approached the 157 yen to the dollar mark in early trading on Thursday. Investors are betting that Kishida will consolidate his power with strong public support and implement expansionary fiscal policies.
Hedge funds are restarting their short positions on the yen, betting that the currency may weaken again ahead of a key vote. If the yen falls further, it will approach the level at which authorities last intervened in the market.
If Kishida wins an absolute majority in the general election on February 8th, the USD/JPY exchange rate will fall back to 160 and the risk premium will reach its maximum, Namik Immelbäck, chief strategist at SEB, noted in a report. If the USD/JPY exchange rate experiences sharp fluctuations and tests 160, the market may intervene. Coincidentally, Wednesday, February 11th, is a holiday in Japan, and market liquidity will be reduced, which is an ideal opportunity for intervention.
Last month, the yen strengthened on rumors that the New York Federal Reserve might conduct an interest rate check. But since then, the yen has given back most of its gains after US Treasury Secretary Scott Bessent said the US “absolutely would not” intervene in the foreign exchange market. The yen’s decline was also exacerbated by remarks from Koichi that a weak currency could bring major opportunities to the export sector.
Technical analysis:
The functions of WeChat are subject to occasional restrictions. If you want to try the plugin, please leave your contact information when adding a friend so that we can add you back easily!!!
Gold: The overnight price swept below the liquidity at 4900 as expected, and then rebounded to around 5020. Currently, the price has retested the 4920 level. It is recommended to observe whether there is a secondary stabilization signal near 4900; or wait for the recovery of the 4960/80 area before considering a long position signal. For detailed positions, please consult the plugin.
(Gold 15-minute chart)
The plugin is updated from 12:00 to 13:00 every trading day. If you want to experience the same plugin as shown in the chart, please contact V: Hana-fgfg and leave your contact information for us to get back to you.
The Nasdaq: Due to the lack of obvious groundbreaking results in the AI narrative, it has instead eroded the business of software companies, leading to a broad decline in software stocks. The Nasdaq index fell below the liquidity level of 24,900 as expected overnight. Currently, the price has temporarily rebounded. However, for those who want to continue to catch the rebound signal today, it is recommended to wait for the recovery of the 25,050 – 25,100 area and then wait for a pullback confirmation before buying. For detailed positions, please consult the plugin.
(NASDAQ 15-minute chart)
The plugin is updated from 12:00 to 13:00 every trading day. If you want to experience the same plugin as shown in the chart, please contact V: Hana-fgfg and leave your contact information in the message for us to reply.
Crude oil: Yesterday’s buy stop recommendation in the blue area of our plugin reaped a profit-to-loss ratio of over 2:1. Currently, the price has retraced to the overnight demand zone for the second time. We suggest waiting for a break of the channel before taking a retracement confirmation as a buy signal. For detailed positions, please consult the plugin.
(Crude Oil 15-Minute Chart)
The plugin is updated from 12:00 to 13:00 every trading day. If you want to experience the same plugin as shown in the picture, please contact V: Hana-fgfg and leave your contact information in the message for us to reply.
Today’s key economic data and events to focus on:
18:00 Eurozone retail sales for December
20:00 Official Bank Rate of the United Kingdom
21:15 Eurozone ECB refinancing rate
At 21:45, the President of the European Central Bank, Christine Lagarde of Germany, will hold a press conference on monetary policy.
21:30 US seasonally adjusted initial jobless claims for the previous week
