From today onward, pay close attention to the sequential releases of euro area indicators!

From today onward, pay close attention to upcoming euro-area indicator results!

Good morning.
At yesterday’s lecture by Fed Governor Lael Brainard, which the market had been watching closely, dovish remarks such as “preemptive rate hikes lack credibility” stood out, and expectations for early rate hikes faded again. As a result, U.S. stocks were bought back significantly, and the USD/JPY and cross yen pairs moved lower.

<12th> NY Close ● Dow Jones Industrial Average = 18,325.07 (＋239.62)
● U.S. 10-year Treasury yield = 1.663% ● USD/JPY = 101.83 ● EUR/USD = 1.1233

As noted yesterday, Brainard has always been a “dovish” on rate hikes. She is the only Fed governor who contributed to Hillary Clinton’s campaign fund, and there are whispers she could be named Treasury Secretary if the Clinton administration takes office.

Therefore, it has also been said that she is somewhat hawkish at times, and there was a faint expectation that her remarks could push the probability of a September U.S. rate hike higher.

Anyway, with this, we are entering the blackout period ahead of the FOMC, and one piece of commentary from U.S. officials will be sealed away until after the FOMC.

As the mood shifts toward “reconsidering a September U.S. rate hike,” market attention is likely to turn again to “so what will the Bank of Japan do?”

Moreover, many view BOJ policy as quite limited at this point, and it is also true that an expansion of easing is not easy to imagine as a major driver pushing the yen lower.

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