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Bullish
According to the latest market information, after Bank of Japan Governor Kazuo Ueda's speech today (December 19), the USD/JPY exchange rate experienced a rapid short-term rise ๐
๐ Market Data
ยท Market Overview: After the speech, the USD/JPY rose approximately 60 points in the short term. The intraday gain once expanded to 0.5%, with the exchange rate peaking at 156.37.
ยท Market Background: This rise in the exchange rate occurred against a crucial backdrop: the Bank of Japan just concluded a two-day policy meeting this morning, and with a 9:0 voting result, it unanimously decided to raise the policy interest rate by 25 basis points to 0.75%. This rate hike was fully expected and priced in by the market.
๐ Analysis of Market Reasons
Market analysis indicates that the yen's depreciation after the rate hike is primarily due to the following points:
1. "Buy the expectation, sell the fact" market reaction
The market widely believes that the 0.75% interest rate is the highest level since 1995, but this rate hike action was fully anticipated and digested in advance. When the expected rate hike actually occurred, traders chose to take profits, leading to a short-term weakening of the yen.
2. The Bank of Japan's "dovish" rate hike stance
Despite the rate hike, the Bank of Japan emphasized in its policy statement that this rate increase is "gradual and cautious" and does not indicate a shift toward restrictive policy, while also expecting actual interest rates to remain significantly negative. This relatively "dovish" (less aggressive) position has weakened market expectations for the Bank of Japan to quickly and significantly hike rates in the future, thereby putting pressure on the yen.
3. The impact of Kazuo Ueda's speech
The market originally expected Bank of Japan Governor Kazuo Ueda to provide clearer guidance on future rate hike paths during the post-meeting press conference. The market reaction, with the yen accelerating its decline after his speech, suggests that his statements may not have delivered the stronger "hawkish" signal that the market hoped for, which was interpreted as bearish for the yen.
๐ In simple terms, the direct reason for the USD/JPY's short-term rise today is: the Bank of Japan conducted a "dovish rate hike" as expected, and the governor's speech did not release any unexpectedly tight signals, leading to "selling the fact" trades dominating the market and putting pressure on the yen.
If you want to further understand the possible technical trends of USD/JPY in the future, feel free to add my Binance ID: 819591468 or join my chat group to discuss together ๐
๐ Market Data
ยท Market Overview: After the speech, the USD/JPY rose approximately 60 points in the short term. The intraday gain once expanded to 0.5%, with the exchange rate peaking at 156.37.
ยท Market Background: This rise in the exchange rate occurred against a crucial backdrop: the Bank of Japan just concluded a two-day policy meeting this morning, and with a 9:0 voting result, it unanimously decided to raise the policy interest rate by 25 basis points to 0.75%. This rate hike was fully expected and priced in by the market.
๐ Analysis of Market Reasons
Market analysis indicates that the yen's depreciation after the rate hike is primarily due to the following points:
1. "Buy the expectation, sell the fact" market reaction
The market widely believes that the 0.75% interest rate is the highest level since 1995, but this rate hike action was fully anticipated and digested in advance. When the expected rate hike actually occurred, traders chose to take profits, leading to a short-term weakening of the yen.
2. The Bank of Japan's "dovish" rate hike stance
Despite the rate hike, the Bank of Japan emphasized in its policy statement that this rate increase is "gradual and cautious" and does not indicate a shift toward restrictive policy, while also expecting actual interest rates to remain significantly negative. This relatively "dovish" (less aggressive) position has weakened market expectations for the Bank of Japan to quickly and significantly hike rates in the future, thereby putting pressure on the yen.
3. The impact of Kazuo Ueda's speech
The market originally expected Bank of Japan Governor Kazuo Ueda to provide clearer guidance on future rate hike paths during the post-meeting press conference. The market reaction, with the yen accelerating its decline after his speech, suggests that his statements may not have delivered the stronger "hawkish" signal that the market hoped for, which was interpreted as bearish for the yen.
๐ In simple terms, the direct reason for the USD/JPY's short-term rise today is: the Bank of Japan conducted a "dovish rate hike" as expected, and the governor's speech did not release any unexpectedly tight signals, leading to "selling the fact" trades dominating the market and putting pressure on the yen.
If you want to further understand the possible technical trends of USD/JPY in the future, feel free to add my Binance ID: 819591468 or join my chat group to discuss together ๐
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