Today, I will explain the following website. (AI-generated)
【米国市況】円安加速で152円台、「高市トレード」に勢い－株息切れ（Bloomberg） – Yahoo!ニュース
Contents
Understanding the Accelerating Yen Depreciation
The Japanese Yen has been experiencing a notable decline in value, particularly against the US dollar. Recently, the Yen has seen its first four consecutive business days of decline this year, at one point falling by 1.1% to 152.04 yen per dollar, marking the lowest rate since February. This depreciation is attributed to the resurgence of carry trade, where investors borrow yen at low interest rates to invest in higher-yielding assets elsewhere, thus increasing the selling pressure on the yen. Additionally, the prospect of an economic stimulus-friendly cabinet led by Sanae Takaichi has diminished the likelihood of an early interest rate hike by the Bank of Japan, further contributing to the yen’s fall.
What’s Behind the Recent Drop in Yen Value?
The recent drop in the yen’s value can be linked to several factors. One of the main drivers is the anticipation of a new cabinet under Sanae Takaichi, which is expected to be positive towards economic stimulus measures. This political shift has led to a decrease in expectations for a near-term interest rate rise by the Bank of Japan, making the yen less attractive to investors seeking higher returns. Furthermore, the carry trade has regained popularity, with investors borrowing yen to fund investments in other currencies, adding to the downward pressure on the yen.
The Impact of ‘Takaichi Trade’ on the Yen and Stock Market
The term ‘Takaichi Trade’ refers to the market movements following the potential victory of Sanae Takaichi in the Liberal Democratic Party’s leadership race. Her win is seen as a sign of continued economic stimulus, which has implications for currency and stock markets. As a result, investors are adjusting their positions, leading to a weaker yen and fluctuating stock prices. The S&P 500 stock index, for example, has shown signs of fatigue after continuously updating its record highs, indicating a market response to the evolving political landscape in Japan.
How Carry Trade is Influencing the Yen’s Performance
Carry trade is a strategy where investors borrow money in a currency with low interest rates, like the yen, to invest in assets denominated in a currency with higher returns. This practice has been a significant factor in the yen’s depreciation, as it increases the supply of yen in the market, thereby reducing its value. The revival of carry trade activities has put additional pressure on the yen, as traders seek to capitalize on the interest rate differentials between Japan and other countries.
Forecasting the Future of USD/JPY Exchange Rates
Analysts’ Predictions Post Takaichi’s Victory
Following Sanae Takaichi’s anticipated victory, analysts have revised their predictions for the USD/JPY exchange rate. BofA Securities’ chief FX and rates strategist, Shusuke Yamada, has increased his forecast, suggesting that the yen could weaken further against the dollar. After surpassing the 150 yen per dollar mark, he expects buying on dips to occur in the event of any subsequent declines.
Revised Exchange Rate Forecasts for 2025 and 2026
Analysts are adjusting their long-term forecasts for the yen in light of recent political developments. Yamada has revised his predictions, raising the expected exchange rate from 153 yen to 155 yen per dollar by the end of 2025 and from 148 yen to 150 yen per dollar by the end of 2026. These revisions reflect the anticipated impact of Takaichi’s potential leadership on Japan’s monetary policy and the yen’s valuation.
Potential Risks to the Current Currency Predictions
While current forecasts suggest a continued depreciation of the yen, there are potential risks that could alter these predictions. A serious economic slowdown or recession in the United States could affect the currency pair, as could any government shutdowns. Analysts are closely monitoring these factors, which could lead to significant shifts in the USD/JPY exchange rate.
Strategies for Forex Traders in a Volatile Market
Identifying Opportunities: When to Buy on Dips
In a volatile forex market, one strategy traders can employ is buying on dips. This involves purchasing a currency after a decline in its value, anticipating a rebound. With the yen’s current trajectory, traders are watching for opportunities to buy the yen after any sharp drops, especially in the context of the USD/JPY exchange rate exceeding the 150 yen threshold.
Understanding the Role of Japanese Authorities in Currency Intervention
Japanese authorities have a history of intervening in the currency market to stabilize the yen’s value. The last intervention occurred in July 2024, when the yen’s exchange rate briefly exceeded 160 yen per dollar. Market participants are now focused on whether verbal or actual interventions will be employed to curb further yen depreciation.
Insights from ING Analysts on Hedge Fund Yen Short Positions
Analysts from ING have reported that hedge funds are increasing their short positions on the yen, betting on further depreciation. This activity is based on levels beyond 150.70 yen per dollar, indicating a bearish outlook for the yen among European-based traders. The market is also watching for any signs of intervention by Japanese officials to slow the yen’s decline.
