There has been more aggressive rhetoric from the U.S., but rhetoric is not going to make the Chinese move faster. They're on the correct path with a gradual strengthening of the yuan. Gradual is the key word.
The situation with the yen is a very strong economic story which hasn't translated into a stronger currency. The one missing piece of the puzzle was the fact that Japanese investors were investing more abroad. Any sign that they're investing less overseas is good for the yen.
His (Weber's) comments are across-the-board hawkish... But the market has to see action. The rhetoric doesn't excite the market anymore.
Economic news from Japan is positive, but the yen isn't benefiting from this very much because we're not likely to see a change in the interest rate policy yet. It's going to be difficult for the yen to stage a convincing recovery until the BOJ acts.
Fukui's comments are positive on a shift in policy, and we may even get rate hikes later this year. That is positive for the yen.
Nothing in today's testimony seems to change this.
I don't expect them to outright sell dollars -- that would lead to a crash, which would hurt China. It may signal a less aggressive accumulation of dollar reserves.
The message was consistent with what the market was already expecting.
The dominating theme in the market is yield. That's supporting the dollar and will continue to do so in the short term until the Fed signals it's thinking about the end of the rate cycle.
The dollar is under pressure and the main driving force for this is the market's expectation that the Fed will stop hiking rates soon.
