Dollar-yen pair fell back to a record high of 108.17 on July 1 (high for the first time in about three weeks) and then fell back to 107.21 (the lowest since June 29), yesterday.

Returning from the turning point of 108 yen, the short orders were strong, and technically it is a chart shape that impresses the “weight of the upper price” (By breaking the lower limit of the Ichimoku’s equilibrium table, a strong selling signal is shown. The three-role, SANYAKU reversal is also established).

In terms of fundamentals, the difference between

(1) US-Japan monetary policy reserves (there is a possibility that Japan has little room for additional easing and the United States has much room for additional easing = yield curve control),

(2) US fundamentals Uncertainty about the future,

(3) Concerns over intensifying US-China conflict (June 30 for NPC, will be passed the Hong Kong National Security Maintenance Bill; US Senate passed on July 2 and Hong Kong Autonomous Bill to impose sanctions on China, will be passed unanimously),

(4) Worldwide Risk of reopening trade war,

(5) Geopolitical risk over the Korean Peninsula, Middle East, and Hong Kong,

(6) New Corona Wave 2 risk (a sense of caution about the resumption of exit restrictions),

(7) Uncertainties about the future of the Japanese economy (industrial production, Bank of Japan Tankan) The result is a dull result from both the household survey and the Japanese economy. The Japanese economy is sluggish, the inflation is slowing, the real interest rate is rising, and the yen is appreciating.

As mentioned above, the dollar-yen is wary of “weight of upside” both technically and fundamentally. Follow-up reports on the new Corona 2nd wave risk, headlines on the US-China conflict intensification, movements of Asian and Western stocks, and the results of major economic indicators of Japan, China and the United States (machine orders in Japan, inflation indicators in China, US Despite staring at the number of new unemployment insurance applications and wholesale sales, etc.

we continue to anticipate a continuous decline in the dollar-yen rate as the main scenario.

Today’s expected range: 106.80-107.60

Analyzed by: Mr. Naoto Arase，Independent Analyst