What will be the dollar-yen movement again in a risk-tavorable mood? The trajectory of the foreign exchange market from now on, 140th edition (updated 2021.07.26)
In Japan's only FX specialist magazine "FX Survival Guide.com," there had been a popular ongoing series for over 130 installments titled "The Way Forward for the Foreign Exchange Market." We will continue to ask economic analyst Tomotaro Tajima what he predicts about how the market, which is moving daily, will behave in the future.
Profile of Tomotaro Tajima
Tomotaro Tajima. Economic analyst. Chief Executive Officer of Alfinnants. Born in Tokyo in 1964. After graduating from Keio University, he shifted careers following his time at Mitsubishi UFJ Securities. He analyzes and researches a wide range including finance and general economics, strategic corporate management, and ultimately individual asset formation and fund management. He serves as a lecturer at lectures, seminars, and training programs hosted by private companies, financial institutions, newspapers, local governments, and various business and industrial associations, with approximately 150 lectures per year. He is a prolific writer of serialized columns and commentary in print media such as Weekly Gendai "Net Trading Rules," Examina "Money Maestro Training Course," and more. He has contributed columns on stocks, foreign exchange, etc., on numerous websites, and is highly regarded as a stock and FX strategist. He also writes for the Basic Knowledge of Contemporary Terms under Free National’s Home Economy section. He has regularly appeared on TV (TV Asahi "Yajima Plus," BS Asahi "Sunday Online") and radio (Mainichi Broadcasting "Tsurumaki's Asaichi Radio"), and currently serves as a regular commentator on Nippon TV CNBC "Market Wrap" and Daiwa Securities Information TV "Economy Marche." His main DVDs include "Very Easy to Understand. Tomotaro Tajima's FX Intro," and "Very Easy to Understand. Tomotaro Tajima's FX Practical Technical Analysis." His major books include "Wealth Reassessment Manual" (Pal Publishing), "FX Chart 'Profit' Formula" (Alchemix), "Why Can FX Make You Asset Rich?" (Texts), and many others. The latest book is "Profit by Riding the Upward U.S. Economy" (Free National).
Risk Appetite Returns and Dollar/Yen Looks to Try for a Rebound
On the 19th last week, the U.S. 10-year Treasury yield briefly fell to 1.17%. Considering the current state of the U.S. economy, this can be seen as clearly too low. In the U.S., travel-related spending this summer is expected to be 50% higher than the same period in 2019, before the pandemic. In Hawaii, the mayor of Maui laments that “a temporary stoppage of reservations is necessary.” In the U.K., most restrictions were lifted on the 19th. Looking at this, it seems reasonable to view the temporary decline in U.S. Treasury yields as a purely technical factor driven by bargain-hunting from those who had been hedging by selling U.S. Treasuries in futures, etc.
On the 19th, the Dow Jones Industrial Average briefly fell by more than 900 points, and the market heard voices saying that “concerns about the pace of economic recovery are rising due to a re-expansion of Delta variant infections,” but this appears to be merely a post hoc rationalization. The situation is now very different from the times when vaccines and therapies were hardly available. In fact, on the 21st, U.S. 10-year yields recovered briefly into the 1.3% area, and the Dow Jones broke new all-time highs again toward the end of the week.
Some in the market proclaim that “the U.S. economy’s recovery has already peaked.” As supporting evidence—
