Attention is on the Trump administration’s forthcoming press conference this Japan time at 1:00 AM today. Until yesterday, there were concerns that if he said something shocking at the conference and a risk-off mentality emerged, there could be trouble, causing USD/JPY to fall.
However, probably nine or ten times out of ten, Mr. Trump will handle the press conference without incident, and a sense of relief could lead to risk-on, making this scenario more likely. Also, many market participants may believe that a new “Trump rally” will occur, and think that is what will happen.
That kind of speculation seems to be nudging stock prices and USD/JPY a bit higher. Until the actual conference, I expect USD/JPY to hover in a bid (strong buying) mood.
After the conference, depending on its contents, U.S. stocks may rise, and especially if U.S. long-term interest rates rise, this would require chasing and buying USD/JPY. Conversely, if Mr. Trump shows protectionist tendencies or openly hostile toward China, then USD/JPY would fall below 115 and sink.
It's a late hour, but today is one to watch.
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