🗞️ Tokyo Sees Dollar Strength and Yen Weakness — The Question Is Whether It Holds Overseas

🗞️ Tokyo Sees Dollar Strength and Yen Weakness — The Question Is Whether It Holds Overseas

🎯 Today’s Focus

Tokyo trading favored a stronger dollar and weaker yen.
The key test now is whether that momentum can be sustained during London and New York hours.

Risk-on sentiment and a sharp drop in the New Zealand dollar pushed USD higher in Asia.
However, with UK CPI, U.S. data, and the FOMC minutes ahead, the durability of this move remains uncertain.

🇯🇵 Tokyo Session: Drivers Behind Dollar Strength & Yen Weakness

① NZD Slump Boosts the Dollar

The Reserve Bank of New Zealand kept rates unchanged, but its statement and governor’s remarks leaned dovish.

👉 NZD fell sharply
👉 Broad USD buying followed

② Additional Yen-Weak Factors

• January Japan trade data showed exports growing at the fastest pace in three years.

• Economy Minister Akazawa outlined a large-scale U.S. investment project.
  → Increased U.S. investment fuels expectations of dollar buying and yen selling.

• Japanese equities remained firm → risk-on yen selling.

As a result, USD/JPY, EUR/JPY, and GBP/JPY all strengthened.

🇬🇧 UK CPI: Core and Services Surprise to the Upside

👉 Core and services CPI exceeded expectations, triggering brief pound buying.

• GBP/USD rose to 1.3578

• GBP/JPY approached 208.50

However, the reaction faded quickly.

💴 Early London FX Moves

• USD/JPY climbed to 153.73

• GBP/JPY hovered near 208.50

• AUD/JPY rose to 108.74

European equities and U.S. futures were firm.

👉 Risk-on tone continues to favor yen weakness.

🇺🇸 Tonight’s Key U.S. Drivers

U.S. Economic Data

• MBA Mortgage Applications

• Housing Starts

• Durable Goods Orders (forecast: -2.0%)

• Industrial Production

• U.S. Treasury International Capital (TIC) data (important)

🔎 Particular focus on TIC flows.
Reports suggest Chinese authorities may be discouraging banks from holding long-term U.S. Treasuries.

→ If U.S. securities investment declines, it could weigh on the dollar.

FOMC Minutes

Minutes from the January meeting.
A dovish tone could cap further dollar gains.

🌍 Geopolitical Risk

Developments in U.S.–Iran negotiations could influence oil, risk assets, and the dollar.

📊 Current Market Snapshot

• Tokyo: Dollar strength, yen weakness

• UK CPI: Temporary pound buying

• London: Risk-on continues to pressure the yen

• Market awaiting U.S. catalysts

🔎 Conclusion

✔ Yen weakness remains intact for now
✔ U.S. Treasury flow data could shape dollar direction
✔ FOMC minutes may trigger dollar consolidation
✔ Geopolitical risks remain a wildcard

We are entering a phase where the market must confirm whether Tokyo’s dollar strength and yen weakness are sustainable globally.

A true breakout likely requires a clear U.S. catalyst.
Until then, expect volatile, range-driven price action.