Testing the yen

11 April, 2016

There is currently a stand-off on the yen between the market and the Japanese authorities and for the moment, the market is winning hands down. Thanks to Friday’s late yen gains, USDJPY has now been falling for seven consecutive sessions (including today). There are two reasons why the market appears to have the upper end. Firstly, we’ve not seen any MoF or BoJ officials coming out hard on the currency, the latest comments coming from the Chief Cabinet Secretary Suga, who merely repeated that they are watching the market with vigilance and would take action as necessary. There were similar comments from BoJ’s Kuroda. Secondly, on many measures the yen is hardly over-valued in the bigger picture, which undermines the case for more aggressive action. For now, it’s more the speed of the move that is the issue, rather than the level, so it’s hard to put a “line in the sand” on USDJPY below which intervention prospects would rise significantly. Stocks have also been catching up with the latest yen moves, Japanese stocks are down overnight against a mostly positive tone in Asia and especially in China.

Elsewhere overnight, we’ve seen steady CPI data from China, the headline rate holding at 2.3%. Food prices were firmer and forward indicators suggest that could be more to come, with PPI data coming in firmer than expected, although still negative at -4.3% YoY (from -4.9% in the previous month). We see UK inflation data tomorrow and the Bank of Canada rate decision comes on Wednesday. We’re not expecting rates to be cut at this meeting, but as always the indications from the statement will be scrutinised for the potential later this year. Elsewhere, all things considered, the single currency continues to perform fairly well, holding its ground against the dollar and outperforming a still suffering pound. For EURUSD, initial resistance comes at 1.1454/95. Sterling managed some recovery into the end of last week, but structurally remains a weak currency in the second quarter, given the bulging current account deficit and looming EU referendum in June


Source link  
Why U.S. markets are under pressure

Global markets are on the rise on Wednesday, adding more than 1.2% on the MSCI Asia ex Japan index. Japanese Nikkei jumped by 2%. Chinese...

Dow recovers after 500 points decline

Stocks closed higher Monday as major indexes bounced back from earlier losses as renewed confidence in the strength of the U.S. economy offset lingering...

Pound rallied, stocks declined

The U.K. main stock index closed lower Thursday, weighed down by weakness for resource stocks and banks and a strong pound as the outline of a key agreement...


Oil slips as U.S. inventories swelled

Oil prices slipped on Thursday after U.S. crude inventories swelled to their highest level since December 2017 amid concerns of an emerging global glut, although...

Crude's Collapse Is Sending Shockwaves

Investors have gone from contemplating the prospect of oil at $100 to sub-$50 in less than two months. No wonder global markets are playing catch-up....

Dollar growth pushed down stock indices

Monday was a hard day for the financial markets. American DJI lost more than 2.3% and S&P500 decreased by 2.0%. As in previous weeks, the main pressure...


U.S. stocks recover after elections

Preliminary estimates of the U.S. election results support a positive mood on the world markets, reducing the demand for protective assets and causing...

Cautious mood has returned to stocks

American markets ended trading on Wednesday with a slight increase. Asian bourses also experienced growth at the opening, but it was quickly...

Emerging markets rebound seems over

Asian markets have turned to a decline with a renewed force. After the rebound of last week, the index MSCI Asia ex Japan loses 1.2% and is only...


In the past 24 hours Bitcoin has lost -4.91% and reached $3310.6779966. Open your trading account with the best cryptocurrency brokers on special terms today.

In the past 7 days the EUR/USD pair has lost -0.0395% and is now at $1.1371. Start trading and making money on Forex today.

In the past 7 days Ethereum has lost -6.07% and is now at $86.3871655918. Have the most popular cryptocurrencies compared online 24/7.


Top Brokers offering Daily Forex Market Reviews


Forex Currencies Forecasts


Top 10 Forex Brokers 2018

# Broker Review
1easyMarketseasyMarkets92%
2FXTMFXTM88%
3HYCMHYCM87%
4Alfa-ForexAlfa-Forex86%
5FxProFxPro85%
6FIBO GroupFIBO Group84%
7OctaFXOctaFX83%
8HotForexHotForex82%
9AvaTradeAvaTrade80%
10FXCMFXCM78%
  


Share: