This week on 3/30: Two things USD/JPY traders should keep in mind

Good morning
How was the triple end-of-term, month-end, and weekend trade?

Over the weekend, US economic indicators led to a large sell-off in USD/JPY

As US stocks fell and funds moved into bonds, bond prices rose

Interest rates fell and the dollar was sold off as a result

This is aimed at advantageous refinancing of US Treasuries due to the decline in interest rates

As the Trump administration intends

The yield differential between US Treasuries and Japanese government bonds and the USD/JPY price

There is a correlation, and the dollar/yen could fall further

What is on the minds of USD/JPY traders right now

the “Mar-a-Lago Agreement”andthe “speculators’ yen-buying positions”are

Regarding the “Mar-a-Lago Agreement,” statements aligned with its contents have been made by President Trump
In the near future, toward Japan, the largest holder of US Treasuries

they may be forced to buy long-term low-rate 100-year bonds

and effectively default on them?

Therefore, would there be underground talk like “Russia is scary, China is scary”
“Demo, if you don’t buy government bonds I won’t protect you”

Could such things be happening beneath the surface?

From Trump’s recent remarks about the U.S.-Japan security treaty,

I am entertaining such fantasies

In any case, the Trump administration wants to lower US Treasury yields

and speculators, anticipating yen appreciation from that, hold large yen-buying positions

But if this drags on, speculators who cannot withstand negative swaps may

start buying back dollars

The positions that have decreased are

not a matter for today or tomorrow, but there appears to have been some dollar-buying back

As a move in the first half of this year, we need to be aware of which direction is dominant

Chart Analysis

USD/JPY Weekly

It is still within an uptrend,
given that in the past it has stopped at yearly pivot lines and risen

we can also expect it to reach the yearly pivot line S1 below

Right now it seems to be held near the 20-MA around 151.717, but

if speculators unwind, it could rise toward around 152.937

Daily

After achieving the Fibonacci 0.382 retracement of the recent decline, it is halted at the 20-MA

4-hour

It is falling, but after reaching the half-way pullback of the recent rise, there is a small rebound

It remains within the rising channel

Breaking this rising line could lead to further declines

1-hour

From the GMM A status, we see a setup for a short-term rebound sell
We target the first touch after a decline

15-minute

There is a blue line resistance immediately above

Nikkei futures are plunging sharply, so

the market may open with a gap down early next week

If it fills the gap and rises,

I am envisioning the orange line’s movement

Tokyo Ward CPI exceeds expectations

Tokyo ward CPI rose to 2.4%

above the expected 2.2%, a slight yen-favorable shift

direction was seen, but fundamentally it was a month-end

and with the April 2 mutual tariff announcement in sight,

it was a quiet movement,

but driven by an actual decrease in US PCE and Consumer Mind Index (final values)

yen appreciation moved

[US] Personal Consumption Expenditures (PCE Deflator) year-on-year (Feb) [2.5%]
Forecast: 2.5%
Actual: 2.5%

[US] Personal Consumption Expenditures (PCE Core Deflator, excluding food and energy) MoM (Feb) [0.3%]
Forecast: 0.3%
Actual: 0.4%

[US] Personal Consumption Expenditures (PCE Core Deflator, excluding food and energy) YoY (Feb) [2.6%]
Forecast: 2.7%
Actual: 2.8%

March University of Michigan Consumer Sentiment Index 57, expected 57.9; prior 64.7

Until now, the Bank of Japan has been deciding policy by looking only at the Japanese economy

which should have sufficed, but

unanticipated tariffs on automobiles imposed against the US and the mutual tariffs

could force the BOJ to change its economic assessment

If a trade war drags the world economy down, the BOJ would be unable to act. If FOMC cuts are delayed as well

the dollar-yen could reverse, favoring buying on dips

and the market could become one where dips are better bought

opportunity for buying the dollar/yen on dips again

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