The first weekend of 2026 began with the U.S. attack on Venezuela.
The military operation, which expanded the application of U.S. law without consensus from the United Nations or the international community, has sent ripples through the international community. In the short term, this will be a risk-off move.

The FOMC meeting minutes at the end of last year showed that the Fed is split in two, with hawks and doves.
The hawkish members are thoroughly hawkish, and it will be difficult to change the hawkish members even if a new Fed chairman takes office.

The dollar touched but did not exceed 157 yen, and the bottom is also range bound at 156.75 yen.
The dollar is expected to weaken on the back of the Fed’s interest rate cut, and only the dollar-yen forecast is higher.

The Eurodollar is expected to strengthen this year, but this morning the range is 1.1713-1.1764.
By process of elimination, the crosses such as EUR/JPY are likely to continue to move higher.

A bursting of the AI bubble or a plunge in the U.S. stock market would change the situation, but this does not appear to be the case.
In Japan, the finance minister has suggested currency intervention, but it is not possible to intervene every day.

An article published in an interview stated that Prime Minister Takaichi said, “I will not cut taxes irresponsibly.
It seems that his former MMT-like statements have been sealed, as he said he will work for solid fiscal management.
He was probably forced to make a correction after winning the LDP presidential election, as the yen continued to weaken unilaterally and long-term interest rates continued to rise.

If the PM’s thinking becomes reality, the speed of the yen sell-off may slow down a bit.
Also, the long yen position in the Chicago IMM has finally been unwound and the market has turned slightly short yen.

Some players had thought that currency intervention would have little effect if the market was long the yen and short the dollar, giving the market a chance to repurchase the yen,
The position turned over may have made it easier to intervene.

We expect the yen to continue to weaken gradually and move toward ¥170.