Week in review
The USD/JPY opened the week at 146.79. Stocks fell sharply due to speculation of a policy shift at the following week's BOJ monetary policy meeting, and expectations of a move to policy normalization grew after the BOJ pushed back ETF purchases, driving the USD/JPY to a low for the week of 146.49. However, the pair rebounded on 12 March after BOJ Governor Kazuo Ueda said that consumer spending is weak at a hearing before parliament. The USD/JPY recovered to below 147.50, then jumped temporarily to the 148-level following a strong US CPI print for February. Yen buying pressure picked up steam and the USD/JPY fell to below 147.50 as employer responses to union wage requests on 13 March indicated that major companies had fully accepted demands for higher wages, but Prime Minister Fumio Kishida's comment that Japan had yet to overcome deflation quashed yen buying momentum. The USD/JPY traded above 147.50 through European hours on 14 March, but the dollar strengthened in US trading hours following the release of the producer price index and other data, and the USD/JPY recovered to above 148. Dollar strength continued in the morning of 15 March, and the USD/JPY had risen to around 148.50 at the time of writing this report (Figure 1). Among G10 currencies this week, the dollar was strong across the board and the yen was in the middle of the pack (Figure 2).
FIGURE 1: USD/JPY
Note: Through 14:00 JST on 15 March
Source: EBS, Refinitiv, MUFG
FIGURE 2: MAJOR CURRENCIES' RATE OF CHANGE VS USD THIS WEEK
Note: Through 14:00 JST on 15 March
Source: Bloomberg, MUFG
