The currency market is sensitive to international economic events and policy announcements, resulting in daily fluctuations. Recent trends have particularly focused on the USD/JPY exchange rate.
As of 2:15 PM, the exchange rate stands at 150.41 yen per US dollar, showing a slight decrease (▲0.05 yen) from the previous day.
Several factors influence the fluctuations in this currency pair, including U.S. monetary policy, economic indicators, and market risk sentiment.
The USD/JPY briefly dropped to 149.85 yen and then rebounded to around 150.55 yen. This movement can be attributed to concerns about the extension of the U.S. Federal Open Market Committee’s (FOMC) monetary tightening, leading to a sharp decline in U.S. long-term interest rates, which acted as a driver for dollar selling and the temporary drop.
Additionally, the announcement of U.S. unit labor cost preliminary figures for the 7-9 months of the year, which came in 0.8% lower on a year-on-year basis contrary to the expected 0.7% increase, eased wage pressure and induced dollar selling.
Furthermore, the previous week’s U.S. initial jobless claims data came in weaker than expected, suggesting a loosening of labor supply and demand, which also weighed on the exchange rate.
Due to these factors, the USD/JPY exchange rate experienced downward pressure, but it gradually recovered as buying momentum became dominant, reaching around 150.55 yen.
Notably, buying interest emerged in the 149-yen range, and the decline in U.S. long-term interest rates paused, contributing to the recovery.
The USD/JPY exchange rate is sensitive to U.S. interest rates and labor market indicators, and investors are closely focused on these factors when making decisions.
Easy Account Opening with XM is Just a Click Away!
Let’s Start by Opening an Account!
[EUR/USD Exchange Rate Fluctuations]
The EUR/USD exchange rate has also been attracting market participants’ attention, with the recent FOMC statement leading to expectations of prolonged U.S. monetary tightening and making the dollar more prone to selling.
The exchange rate hovers around 1 euro to 1.0628 dollars, temporarily rising to 1.0668 dollars.
Fluctuations in this exchange rate are influenced by economic indicators and the outlook for monetary policy in both the U.S. and Europe.
The initial FOMC statement suggested a tightening schedule, raising concerns in the market. However, subsequently revised manufacturing purchasing managers’ index (PMI) figures for October in Europe, particularly for France, Germany, and the Eurozone, which exceeded the preliminary estimates, supported the exchange rate.
On the other hand, when entering the New York market, employment-related indicators hinting at a softening in the U.S. labor market were released, prompting dollar selling.
The exchange rate briefly reached 1.0668 dollars before experiencing a pullback to around 1.0611 dollars.
The EUR/USD exchange rate is highly responsive to economic indicators and monetary policy outlooks in the U.S. and Europe, making market dynamics fluid.
In particular, the direction of U.S. monetary policy and changes in European economic indicators significantly influence the exchange rate’s direction.
Investors need to monitor these factors when making investment decisions.
[EUR/JPY Exchange Rate and Risk Appetite]
The EUR/JPY exchange rate improved as global stock markets rose, reflecting enhanced investor risk appetite.
It briefly reached 160.08 yen around 10:30 PM, maintaining relatively high levels thereafter.
The correlation between the stock and foreign exchange markets is notable, as a risk-on sentiment tends to drive yen selling and euro buying. The global stock market’s ascent reflects improved economic indicators and steady corporate earnings.
Consequently, investors become more willing to take risks, typically leading to increased investments in risk assets. Therefore, the risk appetite for the EUR/JPY exchange rate improved.
Such exchange rate fluctuations demonstrate the balance between risk and return in the foreign exchange market. Investors are highly sensitive to market risk sentiment, adjusting asset allocation based on risk-on and risk-off conditions.
The EUR/JPY exchange rate reflects these trends, with yen selling and euro buying prevailing when risk appetite improves.
[European Stock Market Trends]
European stock markets are also experiencing noteworthy movements. The London stock market saw significant gains, with the FTSE 100 index rising by 104.10 points to 7,446.53, primarily due to increasing expectations of a U.S. interest rate hike pause.
The U.S. monetary policy is closely observed, and any signs of a rate pause are seen as favorable for the stock market.
Real estate stocks like Segro and Land Securities Group, as well as energy stocks, experienced gains in the London market. Additionally, materials stocks such as Rio Tinto and Anglo American performed well.
On the other hand, the Bank of England’s Monetary Policy Committee (MPC) decided to keep monetary policy unchanged, aligning with market expectations. This outcome is as expected, and vigilance regarding the future direction of monetary policy will continue.
European stock markets are significantly influenced by the outlook for U.S. monetary policy and corporate performance, piquing investor interest.
[European Bond Market Trends]
Finally, the European bond market is also affected by overall market trends. European government bond markets are rising in tandem with the surges in the U.S. bond market.
The yield on 10-year UK government bonds increased by 0.117% to 4.382% compared to the previous trading day.
Similarly, the yield on 10-year German government bonds rose by 0.047% to 2.717%.
These bond market movements are influenced by U.S. interest rate trends. The sharp decline in long-term U.S. interest rates has caused European and U.S. government bond yields to decrease, reducing the relative attractiveness of bonds and leading to increased buying in the bond market.
The European bond market’s trends are crucial for bond investors. In risk-off situations, bonds are sought after as safe-haven assets, potentially competing with the stock market in risk-on situations.
Therefore, bond market trends have a significant impact on risk assessment and asset allocation, requiring investors to consider these factors when formulating their strategies.
[Summary]
Currency markets, stock markets, bond markets, and other segments of the financial markets interact with each other and move due to various factors.
Analyzing recent trends, the USD/JPY exchange rate is influenced by interest rates and labor market indicators, the EUR/USD exchange rate fluctuates based on economic indicators and monetary policy outlooks in the U.S. and Europe, the EUR/JPY exchange rate responds to global stock market movements and risk appetite, European stock markets are influenced by the U.S. monetary policy outlook and corporate earnings, and the European bond market is impacted by U.S. interest rate trends.
Investors need to closely monitor these factors when making investment decisions.
コメント