Although the dollar-yen pair rebounded to 108.96 at one point, it was sluggish due to the Ichimoku Kinko Hyo turning line hindering continued growth (reconfirming the weight of the upside). Be wary of short-term downside risks, such as the sell signal illuminating mainly on the lower candles (4 hours or less).

From a fundamental perspective, geopolitical risks are beginning to smolder globally, centered on the risk of US-China-Russia conflict, and the re-expansion of new coronavirus infection (concerns about prolonged lockdown → expectations for early recovery of the global economy), a sense of caution about rising global asset prices (more countries are moving to tighten monetary policy and curb bubbles earlier this month), and a risk of rekindling the risk aversion mood (unwind risk of excess liquidity).

There is an increasing amount of material reminiscent of the decline in the dollar-yen market. Based on the above, we anticipate a short-term decline in the dollar-yen exchange rate as the main scenario (assuming a cross-yen depreciation → a spillover route of the dollar-yen depreciation).

The dollar-yen pair rebounded slightly in the Tokyo market on the morning of the 25th. The dollar-yen pair, which started trading at the 108.73 level in the morning, rose after 10 o’clock to the dollar buying, which is thought to be the actual import demand purchase on the 5th and 10th (GOTOUBI on Tokyo Mid Price Trading at 7:55am Cambodian time), and after hitting a high of 108.99 at one point, it is trading at the 108.91 level as of noon Tokyo time. It was reported that North Korea launched two ballistic missiles early in the morning, but the impact on the dollar-yen exchange rate was limited.

The Nikkei average fell by more than 1,800 yen in four days until the previous day, and rebounded for the first time in five days from the repurchase from a reasonable price, closing the morning trading at 303 yen appreciation.

Today’s forecast range: 108.30-109.10

Analyzed by：Mr. Naoto Arase，Independent Analyst