At the start of the Tokyo market, the USD/JPY dropped to 142.12 yen after Bank of Japan Governor Ueda showed support for more interest rate hikes. Later, the Ministry of Finance said it would change its plan for issuing government bonds due to rising long-term interest rates. This caused long-term interest rates to fall, and the yen became weaker.
Also, President Trump said he would delay higher tariffs on the EU, which made the market feel more relaxed. As a result, all three major U.S. stock indexes went up strongly in the New York market after the holiday. People took more risks, the yen weakened, and the dollar became stronger. This pushed USD/JPY up to 144.45 yen — rising over 2 yen in one day and recovering about two-thirds of the 3-yen drop from last week.
Even though the bond plan changed, the Bank of Japan still plans to raise interest rates. Also, the delay in EU tariffs may not last due to Trump’s unpredictable actions.
This is seen as a short-term correction from the strong yen and weak dollar last week. After the correction ends, the USD/JPY may start falling again.
USD/JPY Expected Range: 143.50 – 144.70
Note: This information does not guarantee profits. Please make your own decisions when trading.