2 min to read
The yen saw a rapid surge
due to Governor Ueda's remarks in the London forex overview.
“The yen exhibited a swift upturn following Governor Ueda’s remarks in the London forex overview”
The dollar-yen pair, initially met with resistance in the Tokyo market, underwent an accelerated phase of dollar selling and yen buying, touching approximately 146.90 yen in the morning. However, it rebounded later to the 147.40 yen range. Governor Ueda’s comments during the morning session at the House of Councillors Financial Affairs Committee, where he addressed the challenging economic conditions anticipated from year-end into the next, coupled with his proactive approach to measures like lifting zero interest rates, prompted a surge in yen buying across the market.
Following this, Governor Ueda held a meeting with Prime Minister Kishida at the Prime Minister’s Office. While Governor Ueda maintained that the meeting primarily involved routine discussions on economic and financial conditions, with no specific talks on forex matters, questions from the press arose regarding exit strategies. In response, Governor Ueda emphasized the necessity to scrutinize whether wage increases would have a cascading effect on prices.
These statements were construed as a favorable inclination toward an exit strategy, leading to an expansion in yen buying. The yen’s robust performance was further bolstered by the anticipation of a rate hike at the Bank of Japan’s monetary policy meeting scheduled for the 18th and 19th of this month. This sentiment was fueled by the optimistic tone in Deputy Governor Himino’s speech the previous day, coupled with the increase in Japan’s 10-year government bond yields.
In the Tokyo market, the dollar-yen pair encountered selling pressure, descending from the upper 147 yen range to the mid-146 yen range. Upon the opening of the London market, intensified dollar selling and yen buying propelled it below the September 11 low of 145.91 yen, precipitously reaching the 144.50 yen range. Following a brief consolidation around the 144.45 yen level observed on September 1, the pair rebounded to the 145 yen range.
Yen buying extended beyond the dollar-yen pair. Euro-yen retreated from the Tokyo morning level around 158.50 yen to the late 157 yen range. In the London market, it experienced additional selling, reaching around 155.70 yen. Pound-yen witnessed a sharp decline from the Tokyo morning level around 185.00 yen to the early 181.90 yen range. Australian dollar-yen also observed a notable rise, falling from around 96.50 yen to the 94 yen range.
With the yen taking the lead, the Euro-dollar pair maintained a range between 1.0755 and 1.085, resulting in restrained movements in dollar crosses.
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