Fed Chairman Jerome Powell said in a speech last Friday that he would not hesitate to raise interest rates further. Although this sounds hawkish at first glance, it was interspersed with words of concern about a recession, such as ‘we are in fairly restrictive territory’ and ‘the effects of tightening are yet to come’.

Although it sounds hawkish, it could actually be interpreted as dovish.
Hence, US interest rates fell sharply and the dollar plunged. This morning, the dollar dropped to around ¥146.23.

The dollar and yen rise and fall as US interest rates rise and fall. For the time being, the move is likely to be based on developments in US interest rates, but there are growing concerns that the US economy may finally be entering a recessionary phase.
In addition, the European economy has entered a recession ahead of the US, and from an overall perspective, there is likely to be some selling potential in the euro/yen.

The biggest event of the week is naturally Friday’s US employment data. In the run-up to this, we expect to see a further adjustment of short yen positions.