The U.S. dollar, which had been soaring steadily since March of this year, suddenly dropped sharply on the night of November 10.
The drop temporarily exceeded 5%, and after settling down, the price continued to fall slowly, reaching the ¥137 level at one point.
I wrote in my blog about the Japanese Ministry of Finance's currency intervention in late October. However, the dollar had been rising since then, and I expected the dollar to continue to appreciate against the yen during the rest of the year. Therefore, I was planning to sell my dollar deposits and convert them to yen when the dollar reached about 155 yen.
However, the dollar suddenly weakened.
The reason is said to be that the US CPI has calmed down more than expected, leading investors to believe that an additional rate hike by the Fed is far away. We do not know the truth of the matter. At the very least, there would have been no foreign exchange intervention by the Japanese government. The dollar has been losing value not only against the euro and the Swiss franc, but also against other currencies, including the Philippine peso.
It peaked at 151 yen per dollar on October 23, and most observers seem to agree that the price will continue to fall for some time.
Since the dollar is likely to continue to fall, I decided to sell my dollar holdings and convert them to yen.
Yesterday, I sold the entire dollar amount in my Sony Bank dollar deposit account.
I sold at 139.50 yen per dollar, which means I made a profit of 29.50 yen from the average purchase price of 110 yen per dollar, but I am not happy at all.
I keep thinking that I could have made more profit if I had sold at 151 yen.
Without bringing up behavioral economics, people are psychologically more affected by losses than gains.
I sold the dollar yesterday because I thought I would lose money if the dollar depreciated any further. This was despite the fact that I was making more profit than when I bought it.
I think I understand why it is said that money has a pathological aversion to loss.。
Since the value of the yen has gone up, the exchange ratio of Philippine pesos has also improved, albeit slightly: 10,000 yen has gone from 3,850 pesos to over 4,000 pesos, which makes me a little happy as I will be in the Philippines next weekend. Well, what will happen next week?
