The U.S. military launches a missile attack on Syria. Using U.S. long-term interest rates as a guide.　Mr. Rikio Shima

Publication date: 2017/04/07 12:20

The Syria situation was leaning toward a victory by the Assad regime. President Trump criticized Obama's Syria policy and planned to cooperate with Russia to acknowledge the reality of Assad's rule, but this changed in an instant, so it's not clear what Trump's diplomacy will do next. Before the U.S.-China summit, was he trying to show that "the United States will act even unilaterally"?

With the U.S. military strike in Syria, the market has uniformly shifted to risk-off mode, and emerging-market currencies such as the Korean won, Russian ruble, and Turkish lira are being sold. Since there seems to be a possibility of improving relations with Russia, I had said that a ruble long would be promising this year, so I'm a bit troubled. However, the biggest reaction is the yen.

I think it's a bit of an overreaction, too. There are market opinions that the No.1 life insurer is buying near 110 yen. The area around 110 yen is very solid and reminds me of last year's defense around the 100 yen level. Once the dust settles, it might rebound.

However, going forward, the outlook has become somewhat unpredictable, so I think we will have to trade USD/JPY with U.S. long-term yields as the guide. If the 2.30% level decisively breaks, heading toward 2.25% and then toward 2.00%, USD/JPY will indeed become heavy. Attention should be paid to U.S. long-term yields.