Reconfirming the Trump administration's pressure on the Federal Reserve, the dollar/yen briefly reached the 146 yen level.

【8/20Market Overview

In Tokyo time, the dollar/yen rose on the back of a larger-than-expected trade deficit in the July trade statistics, with real demand for dollars around the mid-session, reaching147.81yen; however, it stalled just before the fix due to observed dollar selling by export companies. With the Nikkei average soft and domestic long-term yields rising, the dollar/yen fell to147.14yen. In European time, the dollar/yen rose on broad buying of cross-yen pairs and a slight rise in the overseas 10-year U.S. Treasury yield, reaching147.69yen.In New York time, when President Trump indicated that the CookFRB board member suspected of fraud regarding U.S. mortgage contracts should resign immediately, reaffirming pressure from the Trump administration on theFRB, dollar selling dominated. With the decline in the U.S. 10-year yield, the dollar/yen fell to146.87yen.

minutes from the July 29-30 meeting7/29-30 show that “a majority of members recognize that inflation risks outweigh employment risks” and “the majority view that the Fed’s stance is appropriate,” prompting a rebound in the dollar/yen to147.49yen.

【8/21Market View