Eurodollar rose above 1.1670 at the moment as ECB Managing Director Schnabel said, “I don’t disagree with the view that the next move will be a rate hike,” but since there is no immediate rate hike, it returned to its original level.
However, with a rate cut expected in the U.S., the eurodollar is likely to remain firm, given that Europe will eventually enter a rate hike phase after the end of the drawdown phase.

The yen briefly dipped below 155 yen as the Nikkei 225 fell, but it did not last long, and the rise in U.S. long-term interest rates in response to the rise in Japan’s long-term interest rates has instead been a strange thing, as the dollar-yen has been firmer.
Euroyen broke through the November 20 high of 182.00 yen and advanced to 182.15 yen. Since then, the yen has been pushed back somewhat by profit-taking, but the yen selling trend is strong.

Governor Ueda appeared in an online conference with Martin Wolf of the FT and said that Japanese companies have survived the Trump tariffs.
This would mean that the market could raise rates, but a 0.25% rate hike is already 90% factored in and is unlikely to have any impact on the market.

So how can the yen stop weakening?
The government may be considering intervention, but the intervention that worked last year and the year before last was due in large part to the competence of Treasurer Kanda.
It is difficult to believe that the yen selling will stop under the current administration, a cabinet that advocates expansionary fiscal policy.

The yen did not rise when Governor Ueda suggested raising interest rates, but rather the rate hike amid growing concerns about the fiscal situation stimulated long-term interest rates, which are finally approaching the critical 2% level.
Breaking through the 2% level could accelerate the yen’s depreciation rather than its appreciation.

With the BOJ policy meeting coming up this week, many believe that a rate hike will not change the yen’s weakening trend.
However, just as the dollar was sold off when the FOMC meeting, which was expected to be hawkish, unexpectedly turned out to be a dove, there is a possibility of some turbulence.
We would like to go into the meeting without making any predetermined decisions.