It is frowned upon to actively sell dollars... (Updated 2021.08.30)

In Japan’s only FX specialty magazine “FX Kōryaku.com,” which had a popular series over 130 installments titled “The Future Path of the Foreign Exchange Market,” we continue to ask economist Tomotaro Tajima how he predicts the market, which keeps moving daily, will behave in the future.

Tomotaro Tajima Profile

Tomotaro Tajima. Economic analyst. President and CEO of Alfinaunts. Born in Tokyo in 1964. After graduating from Keio University, he moved on from Mitsubishi UFJ Securities to pursue his current path. He analyzes and studies a broad range from finance and economics to strategic corporate management, and even individual asset formation and fund management. He serves as an instructor at lectures, seminars, and training sessions organized by private companies, financial institutions, newspapers, local governments, and various business associations, with about 150 lectures per year. He has written and commented extensively for print media, including Weekly Modern “Rules of Net Trading” and Examinia “Money Maestro Training Course.” He has also contributed columns on stocks, forex, etc., on numerous websites and earned high regard as a stock and forex strategist. He also writes for the Home Economy section of Bungeishunju’s “Kontōyōzu” (Modern Terms Knowledge). He has had regular appearances on television (TV Asahi “Yaji Uma Plus,” BS Asahi “Sunday Online”) and radio (MBS “Tsurugi’s Morning Early Show”), and currently serves as a regular commentator on Nikkei CNBC “Market Wrap” and Daiwa Securities Information TV “Economy Marche.” His main DVDs include “Extremely Easy. Tomotaro Tajima’s FX Introduction” and “Extremely Easy. Tomotaro Tajima’s FX Practical Technical Analysis.” His major books include “Wealth Reassessment Manual” (Paru Publications), “FX Chart ‘Profit’ Formula” (Alchemix), and “Why Can FX Make You Asset Rich?” (Texts), among many others. The latest issue is “Profiting by Riding the Rising US Economy.”

Table of Contents

• FRB Chair’s Speech and Insiders’ Positive “Impression Management”
• Strengthening US Delta Variant Countermeasures to Energize Job Seeking
• Euro/US Dollar, Pound/US Dollar, and Dollar/Yen Outlooks

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FRB Chair’s Speech and Insiders’ Positive “Impression Management”

At the annual FRB symposium held online last weekend on the 27th, Chair Powell’s remarks were perceived by the market as “almost as expected” to “not as hawkish as anticipated.” Considering the current spread of the Delta variant in the US, it is natural that the statements would be perceived as appropriately aligned with the current situation, and in the first place, a Fed chair would not make careless comments that would signal the market.

Several district Fed presidents had publicly shown hawkish viewpoints beforehand, but those appeared to be another instance of insiders’ positive “impression management.” As a result, Powell’s remarks gave the impression that there wasn’t the hawkish shift some in the market had hoped for.

In other words, the market anticipated and felt let down. Consequently, some dollar long positions that had been held a bit more heavily were unwound, giving the appearance of stronger dollar-selling pressure, but that does not necessarily reflect the underlying strength of the US economy at the moment.

Strengthening US Delta Variant Countermeasures to Energize Job Seeking

As is known, the Biden administration plans to begin a third round of vaccinations as early as September. Among US companies, there is a rapid increase in job postings that require vaccination. More companies are prohibiting office work without proof of vaccination, and vaccination is becoming mandatory for public-school teachers and military personnel. In any case, over these coming weeks, Delta variant countermeasures in the US have been strengthened dramatically, and there are countless examples. In the near future, a significant effect is bound to manifest.

If schools and businesses enforce these measures thoroughly, parents regaining child care freedom and those who no longer receive enhanced unemployment benefits will resume seeking employment en masse. As is well known, US job openings are at historic highs, so as job seekers rise,——