Last quote by Masashi Murata
Masashi Murata quotes
Part of the positioning is also seasonal, as some players try to accumulate long dollar positions ahead of the Christmas holiday.
I think it's reasonable to stay with the view that it will eventually head lower, to levels below $1.05.
Participants are not responding very much to reports that suggest Clinton is ahead in some battleground states. Emotions has the edge over logic right now.
It's kind of like a tug-of-war, so the current level around 104 might be the highest level today, and some market participants might try to sell the dollar against the yen ahead of the retail sales.
It remains to be seen if the report can be substantiated. But the mood in the market appears to have shifted with the mention of ECB tapering as it would spell an end to monetary policy divergence.
The market may react to one word, or one phrase, but I don't think her speech will bring a new dollar/yen trend. If Yellen shows less confidence about the U.S. economy, maybe people would like to buy the yen more, but I also think there are longterm investors who step in to buy dollars whenever it falls below 100 yen, so I think it will stay around current levels for a while.
I think many investors want to continue to focus on the Brexit risks, so even if we get some good U.S. employment data, it might not be so helpful to over come weak sentiment. My basic scenario is that dollar/yen will trade between 100 and 105 through the end of September.
The April trade surplus was due in large part to weak imports. Still, the data was enough to trigger yen buying.
I think the odds of (monetary easing) were half and half, but the most surprising point is that the markets seemed to have been surprised.
Not so many people are confident about the U.S. economy and global markets, so the dollar will be rangebound for now.
Instability in the Middle East might lead to the yen being bought against the dollar, but that might be temporary as higher oil prices would support the economy of the United States, a major oil exporter, in the longer term.