Week in review

The USD/JPY opened the week at 157.68 and struggled to break above 158 ahead of the US midterm elections. From European trading on 3 November, strong US economic data added to dollar buying and yen selling, pushing the pair to a weekly high of 158.76. The vote count progressed during Tokyo trading on 4 November, and dollar selling intensified as Democrats secured majorities in both the House and Senate, briefly sending the USD/JPY to below 157.50. The pair then rebounded to around 158.50 after President Donald Trump accepted the election result and signaled a willingness to work with Democrats. The USD/JPY subsequently traded below 158.50 before coming under renewed pressure on 5 November as a sharp selloff in US equities, led by semiconductor stocks, triggered renewed dollar selling and yen buying, pushing the pair back below 157.50. At the time of writing on 6 November, the USD/JPY was trading above 157.50 (Figure 1). Among G10 currencies, the Swiss franc was strong this week, while commodity-linked currencies such as the Australian dollar and Norwegian krone underperformed, reflecting the risk-off tone in financial markets (Figure 2).

FIGURE 1: USD/JPY

Note: As at 14:00 JST on 6 November
Source: EBS, Refinitiv, MUFG

FIGURE 2: MAJOR CURRENCIES' RATE OF CHANGE VS USD THIS WEEK

Note: As at 14:00 JST on 6 November
Source: Bloomberg, MUFG