Today’s Outlook

The dollar/yen pair rebounded after hitting a three-and-a-half-month low of 133.62 on December 2, and then surged to the upper-137 yen level yesterday. This is likely due to waning optimism that the US Fed will slow its pace of rate hikes. However, from a technical point of view, it can be judged that there is little room for the price to rise, given the fact that there are multiple resistance points on the upside and the continuing reversal of the three roles suggesting a strong sell signal. At the 138 yen level, there is a high possibility that the pressure to sell back will increase. Under these circumstances, today, at 20:30 Cambodian time, the November CPI will be released, which will be important in assessing the above (US Fed’s stance.

Average wages in the US November employment statistics released on December 2 exceeded market expectations, and the US November Producer Price Index released on December 9 exceeded market expectations, provided by the Cleveland Fed. Inflation Nowcasting has shown strong results, and the market is becoming more wary of a slight upswing. However, as a result, the CPI will fall below market expectations, reconfirming that the effects of rate hikes are steadily beginning to emerge. For this reason, after the release of the US Consumer Price Index in November, it is speculated that strong downward pressure will be exerted on the US dollar and yen through the path of “lower US long-term interest rates → US dollar selling”. Depending on the situation, there is a risk that the 137 yen level will break again, so we will need to be especially vigilant against downside risks today in the US time zone. Furthermore, in the currency options market, there is a trend to factor in a decline in the dollar-yen exchange rate, such as the continuing trend of expanding yen call over.

Today’s expected trading range is 136.50 – 138.50