Focus on Fed Chair Powell's Speech
In today's Tokyo market, the yen strengthened. Bank of Japan (BOJ) Governor Ueda's renewed commitment to normalizing monetary policy spurred yen buying. The USD/JPY pair temporarily fell by about 1 yen from the previous New York closing price, dropping to around 145.30. Similarly, EUR/JPY also experienced more than a 0.80 yen decline, falling to around 145.30, but the yen's strengthening has since subsided, and the yen's upward movement has somewhat stabilized.
Key Focus: Fed Chair Powell's Speech
In the upcoming overseas market, attention will be on Fed Chair Powell's speech at the Jackson Hole Symposium, hosted by the Kansas City Fed. The recently revised U.S. employment data showed a downward revision of 818,000 jobs for the year ending in March. This means that the monthly employment growth was revised down from 242,000 to about 174,000.
While the U.S. labor market has cooled compared to previous levels, a monthly increase of 174,000 jobs is still a solid number. Moreover, two key economic indicators—the August U.S. employment report and the Consumer Price Index (CPI)—are set to be released before the September Federal Open Market Committee (FOMC) meeting. Chair Powell may hint at a rate cut in September, considering the easing inflation, but he is likely to avoid specifying whether the cut will exceed the usual 0.25%.
On the other hand, Powell is expected to downplay concerns about a hard landing for the U.S. economy. If he emphasizes that the U.S. economy remains healthy despite the cooling labor market and that the likelihood of a recession is low, U.S. stock markets may rise, risk appetite could increase, and yen selling might accelerate.
Other Key Events
Besides Powell's speech, comments from other central bank officials from the U.K. and U.S. are also anticipated in the overseas market. Notable among them are Bank of England Governor Bailey, Atlanta Fed President Bostic, and Chicago Fed President Goolsbee. Additionally, economic indicators such as Canada's retail sales (June) and U.S. new home sales (July) are also due for release.
Trading Strategy
Powell's speech is scheduled, and the resulting market movements will be closely watched. If a significant trend emerges, I will consider trading in line with that movement.
