Japan’s new ruling party leader, Sanae Takaichi, sought to reassure investors that she does not favor an overly weak yen, causing the yen to briefly reverse its decline.
When Koshi made the above remarks, the yen had earlier on Thursday dropped to its lowest level against the US dollar in eight months at 153.22. Shortly after Koshi’s remarks, the yen rebounded to 152.14 against the US dollar, but this support level did not last long and it soon fell again.
The yen has fallen nearly 4% since pro-stimulus lawmakers unexpectedly won the leadership election of Japan’s ruling party last weekend, raising the possibility of a slower pace of interest rate hikes.
Yusuke Miyazaki, a foreign exchange strategist at Nomura Securities, said, “The market now acknowledges that Kuroda has weakened his dovish stance. This is actually Kuroda’s verbal intervention.”
Koike has criticized the Bank of Japan’s interest rate hike measures. She said there is no need to change the policy coordination approach between the government and the Bank of Japan at present, and added that she cannot comment on interest rates.
Jordan Rochester, head of macro strategy for Europe, the Middle East and Africa at Mizuho Bank, said: “Kuroda is trying to remain neutral as much as possible, but the market knows her previous bias and hopes to have a clearer understanding of the government’s view on interest rate hikes before shorting the USD/JPY again.”
Earlier this week, one of Kuroda’s closest economic advisers said that a rate hike in December would be a better time as it would trigger further weakening of the yen, with only a few weeks left until the Bank of Japan’s interest rate decision.
Technical analysis:
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Gold: Yesterday, the green buy limit of the plugin could achieve a profit-to-loss ratio of about 3 times. After refreshing the liquidity below 3950, the price began to rebound. Given that the price maintains a strong upward trend, the intraday operation should still focus on the long position. If it retests 3950 for the second time or recovers 3990/4000, you can consider attempting to go long 1-2 times. For detailed positions, please consult the plugin.
(Gold 15-minute chart)
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Nasdaq: Yesterday, after the plugin refreshed the liquidity in the yellow area, a rebound trend emerged. Maintain a high-low allocation strategy combination within the day. Keep the low-buy order in the green area below, and consider the bullish signal of momentum break after breaking through 25,200 on the upside. For detailed positions, please consult the plugin.
(NASDAQ 15-minute chart)
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Crude oil: Yesterday, our plugin alerted us to directly break through the blue area and buy with a buy stop, achieving a profit-to-loss ratio of about 3 times. Currently, the price has returned below 62. The key resistance for today is the 62 integer level that was broken overnight. We do not recommend going long unless 62 is broken today; or wait for the liquidity below 61 to be refreshed and have enough space before attempting 1-2 low long operations. For detailed positions, please consult the plugin.
(Crude Oil 15-Minute Chart)
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Today’s key economic data and events to focus on:
22:00 Preliminary reading of the University of Michigan’s consumer sentiment index for October in the United States
22:00 Initial reading of the University of Michigan’s one-year inflation expectation for October in the United States
