Last week, the U.S. retail sales report showed positive results, and the U.S. dollar was able to reach the 150-yen mark in the U.S. market. In the Tokyo market, immediately after the open (9:00 am), Treasurer Mimura made a statement of caution and the pair fell back, unable to maintain the 150-yen level, but there was strong dollar buying at the push point and the pair moved back and forth between the 150-yen and 150-yen levels.

In Europe, the ECB Council cut interest rates by 0.25%. After the meeting, President Lagarde maintained her dovish stance; at the time of the September meeting, there was no indication of a rate cut at the October meeting. In this sense, the ECB is accelerating the pace of rate cuts. Perhaps the European currency is on a gradual downward path. The key point is that the euro did not buy back, although the ECB emphasized its position that it depends on the data.

In the U.K., CPI came in well below market expectations and the pound dollar fell sharply; the 0.25% rate cut in November is mostly factored in, but December is likely to be another consecutive rate cut. The dollar is also supported by the fact that Trump’s chances of becoming president are increasing. If Trump’s policies continue, tariffs and tax cuts are likely to strengthen the dollar.

As for stocks, NVIDIA hit a new high and the Nikkei 225 recovered to the long-awaited 40,000-yen level. However, it was weighed down by profit-taking selling and closed in the upper 39,000-yen range. The dollar was also once sold off by exporters and Chinese stocks in the late session, which led to the Nikkei’s decline and the yen’s appreciation as excessive expectations for economic stimulus measures were removed. The Israeli news that it would not attack Iran’s oil and nuclear facilities was likely to push crude oil prices lower, as fund managers adjusted their long positions. The sharp drop in crude oil prices was also a downside factor for the dollar against the yen due to lower U.S. interest rates. Downward pressure will be exerted. However, its effect will be limited.

Important political events are also looming: Japan’s lower house election on November 27 and the presidential election on November 5. As the dominance of former President Trump and the Republican Party is gradually being reported, the “Trump trade” is still being considered. In the market, the dollar yuan surged to the 7.13 level. This week was a week of dollar strength, but there are no particularly important economic indicators for the first half of next week. The dollar is expected to remain strong next week and beyond, as tariff hikes and tax cuts are likely to boost the dollar.