On Sunday, Prime Minister Ishiba suddenly announced his resignation. This surprise news led to selling of the yen, and the dollar/yen rose more than 1 yen from last week’s close to 148.57. Investors thought the next government might spend more money, making interest rate hikes difficult.
However, the U.S. jobs report last week was weaker than expected, which increased the chance of Federal Reserve interest rate cuts. Because of this, the dollar was sold, and the dollar/yen went back down to the mid-147 range in New York trading.
The resignation of Prime Minister Ishiba was a shock for the market and caused temporary yen selling. But with U.S. rate cuts likely, the dollar also has little power to go higher. After testing the upside, the next move may be to test the downside.
Dollar/Yen expected range: 146.80 – 148.00 yen
Note: The above is not a promise of profit. Please make your own decision when trading.