August forecast results. In the beginning of this August, I expected that (i) 1 dollar will exceed 112 yen. I also forecasted that (ii) one dollar will not fall below 108 yen. As a result, while (i) was incorrect, (ii) was correct.

In the beginning of this August, I expected that (i) 1 dollar will exceed 112 yen. I also forecasted that (ii) one dollar will not fall below 108 yen. As a result, while (i) was incorrect, (ii) was correct.

Why was (ii) correct? Why did not one dollar go below 108 yen?

The dollar-yen exchange rate depends on the following two points:

First, will people sell Japanese Yen (/ home currency) and buy U.S. Dollar?

Second, will people sell U.S. dollars (/ home currency) and buy Japanese Yen?

As shown in the table below, I forecasted Japanese Yen to depreciate. Since the expectations were generally correct, one dollar did not fall below 108 yen.

Why was (i) incorrect? Why did not one dollar exceed 112 yen?

Mainly because the US interest rates did not rise as expected.

At the time I forecasted, I thought that the US corona measures were working well and therefore the economic recovery would be in full swing. I didn't expect coronavirus variant to be so prevalent.

I also expected that the European corona measures would progress, the euro would become stronger, the euro would be bought instead of the yen, and, as a result, Japanese Yen would depreciate. However, it did not come true.

Afghanistan was also unexpected, but looking back on it, I think the re-emergence of coronavirus variant was a main factor that was unexpected.

I think Japanese Yen will continue to depreciate in September. I will post a little more detailed forecast later.

		Forecast	Results
		I expected that (i) 1 dollar will exceed 112 yen. I also forecasted that (ii) one dollar will not fall below 108 yen.	△     While (i) was incorrect, (ii) was correct.
Analysis	The reasons why I thought people will buy U.S. dollar.	Employment Statistics will improve: Expected to improve as employment benefits (money you get if you don't work) are about to run out and more people will try to find a job before the start of the new semester in the United States.	〇　It became true.
		U.S. interest rates will rise: Jackson Hole will impress a steady recovery in the United States. It is possible that a concrete plan for tapering will be shown. Other price indexes are expected to improve steadily, and interest rates are expected to rise.	△     As I expected, Federal Reserve Chairman Jerome Powell said that taper could start in 2021 delivers, at Jackson Hole symposium. However, the interest rates did not rise as I hoped.
		US stocks or US Treasuries will be bought: I expect US stocks to be bought if the economy recovers well, and US Treasuries to be bought if the economic recovery is delayed with Delta variant.	〇　It became true.
	The reasons why I thought people will not buy Japanese Yen.	The number of people infected with the COVID 19 virus will increase in Japan: I expect to see a significant increase during the Olympics.	〇　Unfortunately, it became true.
		Political distrust will be increased: Japanese people will not forgive politicians given the circumstances. I expect the approval rating to drop.	〇　It became true.
		Japanese equities: As a result of the above, I do not expect foreign investors to return to Japanese equities.	〇　It became true.
		Euro: Euro will rise since Europe is managing the Covid-19 situation better than Japan.	×　It did not come true.