On October 7th, the Japanese stock market opened sharply, and as of press time, the Nikkei 225 index rose 2.11%.
On the news front, the Japanese yen fell, and on October 7th, the US dollar rose to 149.10 against the Japanese yen, the highest since August 16th.
The strong US dollar is making a comeback, while the Japanese yen has suffered a heavy blow. Last week, the US dollar index continued to strengthen, with a weekly increase of 1.6%, marking the largest weekly increase since September 2022. Among them, the Japanese yen was hit the hardest, with the yen falling 4.4% against the US dollar last week, marking the largest weekly decline since 2009.
The internal reason for the sharp decline in the Japanese yen exchange rate is the significant transformation of Japan's newly appointed Prime Minister Shigeru Ishiba. He stated last week that the Japanese economy is not yet ready for further interest rate hikes. This is clearly contrary to his previous stance of supporting the Bank of Japan to end its monetary stimulus policy. On October 6th, former finance official of the Ministry of Finance in Japan, Eiji Sakamoto, stated that the depreciation trend of the Japanese yen may continue in the short term.
The external pressure for the significant depreciation of the Japanese yen mainly comes from the strong counterattack of the US dollar. Last week, the US dollar index recorded five consecutive days of gains and has now reached its highest level since August 16th. Affected by the September employment data in the United States, the expectation of the Federal Reserve cutting interest rates has significantly cooled down, and traders have significantly reduced their short bets on the US dollar. Analysts believe that the latest employment data significantly enhances the strong momentum of the US dollar, and the rise of the US dollar may continue further.