Dollar-yen pair dropped to a low of 107.36 over the US time when it topped the high of 108.17 recorded in the morning of Japan time (high for the first time in about 3 weeks). The flight time at the 108-yen level is extremely short (the selling pressure is strong, returning to the 200-day moving average line), and from a technical point of view, it is a chart shape that impresses the “weight of the upper price”.

From a fundamental’s perspective,

(1) the difference in the US and Japan’s monetary policy reserves (there is a possibility that Japan, which has little room for additional easing, and the United States, which has a lot of room for additional easing, may adopt the yield curve control. *FOMC meeting announced yesterday. The summary agrees that further analysis is needed for yield curve control),

(2) uncertainty about the future of US fundamentals,

(3) concerns over intensifying US-China conflict (some media reported yesterday that the US government Is preparing for China’s sanctions”),

(4) Risk of restarting the global trade war (the uncertainty about the US presidential election is increasing, and hardline diplomacy by the US administration of Trump may increase),

(5) Geopolitics over the Korean Peninsula, Middle East, Middle India, Hong Kong, and Mexico. Risk,

(6) Second wave risk of new corona (California has the highest number of new infections per day),

(7) Uncertainty about the Japanese economy (deceleration of inflation → rising real interest rates → yen appreciation),

(8)  Across the United States, there are still a lot of materials left to recall the decline in the dollar-yen exchange rate, such as a protest against racial discrimination.

As mentioned above, the dollar-yen is wary of “heavyweight” both technically and fundamentally. We confirmed the heavyweight at the 108-yen level and confirmed that the new corona second wave risk and the risk of intensifying conflict between the United States and China is the weight of the market.

US employment statistics (NFP) announced today will be very important for looking closely. We continue to expect a decline in the dollar-yen exchange as the main scenario.

Today’s expected range: 107.00-108.00。

Analyzed by: Mr. Naoto Arase，Independent Analyst