Former President Trump said that the country has a big currency problem, the dollar is strong against the yen and the yuan is weak.

From the Bloomberg interview, the dollar fell sharply against the yen and the yuan. The low was 156.10 yen. Long dollar/yen positions were rapidly unwound, as many had expected the dollar to strengthen if Trump became president, as he would raise tariffs and cut taxes.

There are questions about the means by which he will induce a weaker dollar. Also, it is not yet decided that Trump will be the next President of the United States. Nevertheless, the market is likely to continue to assume that Trump will be the next president. The ECB’s policy announcement was unchanged. President Lagarde’s press conference was also nothing special.

Digital Minister Kono called for the BoJ to raise interest rates, which, combined with Trump’s comments, pushed the yen higher, but Finance Minister Suzuki said that the BoJ’s independence should be respected, and Digital Minister Kono also said that he is not directly asking the BoJ to raise rates now, which led to a correction of Friday’s move in the direction of a stronger yen. The USD/JPY high was at 157.86 yen. However, concerns about the yen’s weakness remain high, as Finance Minister Suzuki said he would like to express his concerns about the yen’s weakness at the G20.

In this context, the BoJ’s policy meeting at the end of this month will be of interest. With the September US interest rate cut finally in sight, the market would be pleased if a yen rate hike and a US rate cut were to start at the same time. This is because US interest rates have been falling recently, Japanese interest rates may also rise, and Trump, who is likely to become the next President, has a policy of a weaker dollar.

The market is building up long dollar/yen positions and if US tech stocks are falling further, the dollar/yen is likely to be heavy-headed.