USD/JPY falls to 144.92 amid expectations of a yen depreciation correction. Downgrade of U.S. credit rating also weighs.

【5/16Market Overview

During Tokyo time, dollar/yen fell below the previous day’s low of145.41yen, triggering selling. With U.S. 10-year yields in overseas trading also retreating, it briefly fell to144.96yen. Afterwards, remarks by Taiwanese government officials stating, “ Forex is not part of U.S. trade talks” helped yen-buying emerge, bringing it back to145.46yen. In European trading hours, with speculation about a yen correction growing, European participants entered selling of the dollar and buying of the yen, sending the dollar/yen briefly to144.92yen. Thereafter, European stocks remained firm with the DAX hitting a record high, supporting the dollar/yen’s recovery. In New York time,5month U.S. University of Michigan consumer sentiment index flash fell short of expectations, but the simultaneously released1year ahead inflation expectations rose above expectations, leading to broad dollar buying and sending the dollar/yen to146.10yen. Later, the dollar/yen eased as Moody’s downgraded the U.S. credit rating from “AAA” to “AA1,” which weighed on markets.

【5/19Market View