The Nikkei 225 has also soared on the soaring share prices of AI-related companies in the US market, with pre-bubble highs of JPY 38915 in sight.

The USD/JPY has also tended to link up with the Nikkei and has remained steady. It could be said that it depends on the US CPI, but if the US dollar falls on a low figure, it is likely to be a buying opportunity. US Chairman Powell has stated that the US will not cut interest rates in March, while Japan’s change in policy, if any, would be a change of around 0.1%.

As Japanese stocks rise, the unrealised gains on shares held by Japanese companies will also rise, making risk-taking easier. As in the past, a rise in the Nikkei 225 has tended to weaken the yen, this time too a firming of Japanese equities could lead to a firming of the dollar/yen. selling is thick above ¥150, but there are many barrier options triggers, so the yen could rise quickly if momentum builds up.

Meanwhile, Japan’s GDP fell by a surprising -0.4% in Oct-Dec, compared to +1.4% expected. Real wages continue to fall, cooling domestic demand. The weak yen is contributing to the cooling of domestic demand, but negative growth increases speculation that the BOJ’s normalisation may also be delayed.

UK GDP was also negative. Only the US maintains a high growth rate while Japan, the UK and Europe all have negative growth. The dollar is overbought after the CPI and is about to fall below 150 yen, but we want to keep pushing.

The CPI figures were unexpectedly strong, leading to a sharp rise in the dollar. However, figures such as owner-occupied rents were extremely high, so it can be said that the inflation trend is still calm, and together with PPI, the PCE core deflator figures will be determined.

If the figures are stronger than expected, the dollar will still be strong. Retail sales fell below market expectations, but this was due to bad weather. If the US economy strengthens, the dollar is likely to continue to strengthen on its own as both the UK and Japan enter recession.