On February 9, Japan's Vice Minister of Finance for International Affairs, Atsushi Mimura, stated to reporters on Monday that the government is "watching market moves with a high sense of urgency, as always," and mentioned maintaining "close communication with the market." Mimura's remarks continue the official framework of being "ready to respond at any time" to foreign exchange market developments: emphasizing urgency and open communication channels with the market. Satsuki Katayama's comments carried more of a "preemptive reassurance and warning" tone. On one hand, she indicated readiness to communicate with the market if necessary; on the other, she stressed the existence of a US-Japan memorandum of understanding and explicitly stated that Japan could take decisive measures, "including intervention," against rapid fluctuations deviating from fundamentals. Against the backdrop of renewed downward pressure on the yen, such statements are typically interpreted by the market as a sign that the distance between verbal warnings and actual action may shorten when the speed and magnitude of fluctuations reach policy tolerance levels.
Furthermore, a Bank of Japan board member emphasized that further increases in the benchmark interest rate are necessary to complete the process of monetary policy normalization, a stance that may continue to fuel market expectations for an earlier rate hike. Bank of Japan Board Member Masu Kazuyuki stated in a speech to local business leaders in Ehime Prefecture, western Japan, last Friday: "I believe Japan must continue to raise the policy rate to complete monetary policy normalization." Kazuyuki noted that raising interest rates would help end the divergence between Japan's monetary policy and that of other countries. Although he did not elaborate further, the interest rate differential between Japan and other major economies has long been considered a core reason for the yen's persistent weakness; the yen's depreciation, which raises import costs, has already burdened Japanese corporate operations and household livelihoods.
Key data to watch today include the Eurozone's February Sentix Investor Confidence Index and the US January Conference Board Employment Trends Index.
Gold / USD Gold rebounded sharply last Friday, reclaiming most of the losses from the previous trading session, with the spot price currently trading around 5030. Besides short covering providing some support, dovish comments from Federal Reserve officials were also a significant factor supporting gold's rebound. Additionally, safe-haven demand spurred by escalating tensions between the US and Iran was a key element underpinning the rise in the precious metal. Today, focus is on resistance near the 5100 level, with support found around 4950.
USD / JPY The USD/JPY pair consolidated with a slight daily gain last Friday. Investor concerns over Japanese political uncertainty were the main driver supporting the pair's continued ascent. However, a softer US dollar and fears of renewed intervention by the Bank of Japan in the currency market limited the pair's upside. During the early Asian session, the USD/JPY pair retreated after an initial spike, influenced by clarity in Japanese election results and signals from Bank of Japan officials regarding potential market intervention. The pair is currently trading around 156.50. Today, attention is on resistance near 157.50, with support around 155.50.
USD / CAD The USD/CAD pair moved lower last Friday, hitting a fresh 4-day low, with the spot price currently trading around 1.3650. Besides profit-taking exerting some downward pressure, a weakening US dollar—pressured by its own profit-taking and dovish remarks from Fed officials—was also a significant factor weighing on the pair. Furthermore, rising crude oil prices, supported by renewed supply concerns due to geopolitical tensions, also contributed to the pair's decline. Today, focus is on resistance near the 1.3750 level, with support around 1.3550.