Today, I will explain the following website. (AI-generated)
歴史的円安の修正進まず トランプ氏の政策で変動も 25年為替展望（時事通信） – Yahoo!ニュース
Contents
Understanding the Persistent Weakness of the Japanese Yen
The Japanese yen has been experiencing a historic depreciation, with many market participants predicting that a correction from these low levels is unlikely to progress. The Bank of Japan (BOJ) is cautiously raising interest rates while the Federal Reserve (Fed) continues to cut rates, influencing the yen’s value. However, the economic policies of the incoming Trump administration, starting January 2025, bring a degree of uncertainty that could lead to fluctuations in the forex market.
Overview of the Yen’s Historical Depreciation
In 2024, the yen’s exchange rate against the dollar saw significant volatility, with a range exceeding 22 yen. Starting the year at 141 yen per dollar, the yen weakened to a 37-and-a-half-year low of 161.94 yen in July, driven by a retreat in expectations for U.S. rate cuts. However, it later rallied to a high of 139.50 yen in September due to BOJ interventions and additional rate hikes, as well as renewed U.S. rate cut expectations.
Factors Influencing the Lack of Correction in Yen Value
The limited narrowing of the interest rate differential between Japan and the U.S. is one reason the yen’s appreciation is not accelerating. Despite the BOJ ending negative interest rates and raising rates in 2024, further hikes are expected to be limited. Conversely, the Fed reduced the number of projected rate cuts for 2025, indicating a slower pace of easing.
Expectations for the Yen in 2025 Amidst Trump’s Policies
Out of 11 market experts surveyed, only one predicted a stronger yen in 2025, with most expecting it to hover around or slightly below the low levels of 2024, between 160 to 163 yen. The potential impact of Trump’s policies, such as additional tariffs, tax cuts, and immigration restrictions, is seen as inflation-inducing and could limit the Fed’s rate cuts.
Insights into the Forex Market Movements in 2024
The Impact of US Economic Trends on the Yen-Dollar Exchange Rate
The yen’s fluctuations in 2024 were largely influenced by the U.S. economy’s robust performance and the subsequent shifts in rate cut expectations. This led to a cycle of yen selling and dollar buying, with the yen reaching significant lows before rebounding on central bank actions and changing rate expectations.
Interventions and Policy Changes by the Bank of Japan and the Federal Reserve
The BOJ’s interventions and policy shifts, including the cessation of negative interest rates and additional rate hikes, played a crucial role in the yen’s movements. Meanwhile, the Fed’s consecutive rate cuts followed by a reduced rate cut forecast for 2025 highlight the contrasting monetary policies of the two countries.
Market Predictions for the Yen in 2025 Based on Expert Surveys
The majority of surveyed market experts foresee the yen maintaining its weak stance in 2025, with only a slight possibility of appreciation. The interest rate differential between Japan and the U.S. is expected to remain significant, even if both the BOJ and the Fed make modest policy adjustments.
Implications of Trump’s Economic Policies on Forex Trading
Understanding the Potential Effects of Additional Tariffs, Tax Cuts, and Immigration Restrictions
Trump’s proposed economic measures, including additional tariffs, tax cuts, and immigration restrictions, are considered to be potentially inflationary. These policies may influence the Fed’s monetary policy by limiting the frequency of rate cuts.
How Inflationary Policies Might Influence Federal Reserve Decisions
If Trump’s policies lead to inflation, the Fed may be constrained in its ability to cut rates. However, should the economy slow down, Trump may call for rate reductions to stimulate growth, adding complexity to the Fed’s decision-making process.
Market Sensitivity to Trump’s Actions and Statements
The forex market is expected to react to Trump’s policies and pronouncements, with investors experiencing a mix of optimism and concern based on his administration’s actions. This sensitivity underscores the importance of staying informed on political developments for forex traders.
