On July 17, 2024, Jason Lau, Managing Director of KCM Trade Australia, was once again invited to appear on SBS Radio's program. As a seasoned expert in the financial markets, Jason provided listeners with an excellent analysis of the exchange rate market with his unique insights and in-depth analysis.
Yen Exchange Rate Volatility: A Game Between Market Speculation and Central Bank Intervention
Jason first reviewed the recent volatility of the yen. He pointed out that since the end of June, the yen exchange rate has been at its lowest level in 38 years, with the USD/JPY exchange rate once breaking the 160.00 mark and experiencing a rare single-day surge of 3% last Thursday. He analyzed that this volatility is mainly due to two factors: first, the US CPI data was lower than expected, enhancing market expectations for a Fed rate cut in September, leading to a decline in the dollar; second, the suspected intervention by Japanese authorities to curb excessive yen depreciation.
Jason further noted that although Japanese Ministry of Finance officials have not directly admitted to market intervention, their statements have indirectly confirmed it. He emphasized that the yen’s weakness has deviated from fundamentals due to market speculation.
To maintain domestic economic stability, Japanese authorities had to take intervention measures. Data shows that from the end of April to the end of May, the Japanese Ministry of Finance used about 9.8 trillion yen (approximately $61 billion) to defend the yen exchange rate, and last Thursday, they used another 3.5 trillion yen (around $22 billion) for intervention.
Australian Dollar Strengthening: Reflecting Rising Commodity Prices and Global Economic Conditions
Regarding the strong performance of the Australian dollar, Jason Lau stated that this is mainly due to rising commodity prices and the positive global economic situation. Over the past four weeks, oil and gold prices have been increasing, directly driving the appreciation of the AUD. In addition, the stable performance of the Australian job market has also provided strong support for the AUD.
Jason reminded investors to pay attention to the upcoming Australian employment data. Although the market does not expect any major surprises, any positive changes in the job market could further drive the appreciation of the Australian dollar. He advised investors to closely monitor changes in the global economic situation and adjustments in the monetary policies of various countries to adjust their investment strategies timely.
Professional Advice: Maintain Caution and Diversify Investments
In the final part of the interview, Jason offered some valuable advice to investors. He pointed out that in the current context of increased global economic uncertainty, investors should maintain a cautious and rational attitude, avoiding blindly following trends and chasing highs and lows. At the same time, he emphasized the importance of diversified investments to reduce the risks and volatility of single assets.
Jason stated that KCM Trade will continue to monitor the dynamic changes in the global financial markets, providing investors with timely, accurate, and professional financial information, market analysis, and hot topic analysis. He hopes that through the team's professional knowledge and extensive experience, they can help investors better cope with market challenges and achieve wealth growth.
Click here for the SBS Cantonese exclusive interview with Jason
