Dollar/Yen rose to 162.48 yen following hawkish remarks by Fed Governor Waller amid escalating Middle East tensions.

【7/13Market Overview

In Tokyo time, as retaliation between the United States and Iran continued, crude oil futures rose and the dollar strengthened, with the USD/JPY rising to162.17yen. Later, some reports indicated that “the government does not currently plan to change the GPIFGPIF portfolio (basic asset allocation).” This cooled expectations for domestic investment and the USD/JPY rose to162.35yen. In European hours, Chief Cabinet Secretary Kobayashi stated that “the GPIF’s portfolio adjustments will be made if necessary,” and the USD/JPY fell to161.82yen, but soon recovered. In New York time, President Trump announced the “re-sealing” of Iranian ships and indicated an intention to seek a 20%20% compensation for other cargo transiting the Strait of Hormuz, which caused crude futures to surge and led the dollar to rally. Subsequently, Fed Governor Waller said that “the recent rise in core inflation is very broad” and that “this week’s inflation data will determine whether a near-term tightening is warranted,” sending US 10-year yields higher and pushing the USD/JPY to162.48yen.

【7/14Market View