The yen hovered close to its lowest level in nearly four decades on Wednesday as rising oil prices and Treasury yields pushed the dollar higher. The US has completed a fresh round of strikes against Iran.
A Tuesday morning attack by Iran on a tanker in the Strait of Hormuz forced its crew to abandon the vessel, underscoring Tehran's aggressive move to dominate the strategic waterway.
A combination of strong semiconductor equipment sales and a weak currency propelled Japanese exports up 19.3% in June, the sharpest growth rate the country has seen in nearly four years.
Despite that, there was a massive increase in petroleum imports, with a 59.3% jump year on year thanks to higher oil prices. That resulted in a larger-than-expected trade deficit of 406.9 billion yen.
The yen's upside momentum faded after the Japanese finance minister's suggestion that the state pension fund might reallocate foreign investments into domestic markets lost its impact.
HSBC noted that currency intervention will fail to provide long-term relief unless the BOJ aggressively hikes rates, the Fed shifts toward cutting rates, or market sentiment regarding Japan's fiscal health improves.
EBC Financial Group analyst says, the yen was in a strong downtrend, but flagged signs of waning momentum. A bullish MACD divergence suggested a potential rally towards the support-turned- resistance around 162 per dollar.
Asset recap
As of market close on 21 July, among EBC major products, Micron Technology shares led gains after BofA Securities maintains the target price at $1,550 with a buy rating.
Danahe cut its 2026 core-revenue primarily due to severe shipment delays and timing issues in its Bioprocessing business. RBC Capital Markets called the outlook "mixed and not consistent with a re-acceleration narrative."
Renewed Middle East hostilities are threatening key oil supplies. The IEA warns that despite existing market safety nets, stakeholders cannot afford to let their guard down.
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EBC Financial Group Disclaimer: This material is for general information purposes only and is not intended as (and should not be considered to be) financial, investment or other advice on which reliance should be placed. No opinion given in the material constitutes a recommendation by EBC Global Financial Collaboration or the author that any particular investment, security, transaction or investment strategy is suitable for any specific person.
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