USDJPY eyes Japans inflation numbers

25 June, 2015

It has been a volatile session in Asia for some currencies, with both AUDUSD and NZDUSD attempting to make a run for it as USDJPY sank. Asia’s major commodity currencies were bolstered by news that Beijing was injecting around 35bn through 7-day reverse repos and the prospect of further stimulus as plans emerge that China may be moving to scrap a 75% cent loan-to-deposit ratio limit at banks. AUDUSD was propelled to short-term resistance around 0.7750 and NZDUSD stalled out just beyond 0.6920.

Meanwhile, USDJPY fell around 30 pips as the Nikkei also fell. This didn’t break any major support zones but it highlights how nervous investors are when it comes to USDJPY. There has been a lot of chatter lately that the pair may be overvalued in the short-term and even whispers that the BOJ is getting uncomfortable with the yen’s weakness. This opens the pair to some profit taking but we aren’t looking for a major fall.

From fundamental perspective, the big threat to global risk appetite at the moment is the prospect of Greece being the first developed country to default on its debt if it fails to secure emergency funding from its creditors. It will be interest to see how this plays out in USDJPY as both currencies are traditional safe haven plays, but we tend to think that widespread US dollar strength would outweigh any moves towards the yen.

It’s also worth keeping a close eye on Japan’s inflation and employment numbers for May (due out at 0930AEST on Friday). Headline consumer prices are expected to rise 0.4% and we aren’t looking for any growth in core-CPI, which represents a big drop for an already soft 0.3% increase in core consumer prices in the prior month. The present pace of inflation in Japan suggest that further stimulus may be needed to support domestic demand, while an even lower than expected set of numbers tomorrow may increase the motivation of the BoJ to expand its QQE program even more, which is generally yen negative.

USDJPY

As my colleague Matthew Weller explains here, USDJPY was looking somewhat strong from a technical perspective, but it recently failed to break through an important resistance zone around 124.50 which opens the door further downside in the short-term. As Matt pointed out, 124.50 is key!


Source link  
Gold surges to major $1250 resistance as uncertainty prevails

Gold surged Thursday on a breakout of its previous consolidation to hit and slightly exceed major technical resistance at $1250, a level not seen since early November...

Gold remains vulnerable amid hawkish Fed, strong dollar, equity highs

Gold has climbed sharply since the beginning of the year as the US dollar has pulled back from its late-2016 highs and the US Federal Reserve has exercised characteristic restraint in raising interest rates further after the last rate hike in December...

Gold well-supported on safe-haven flows, lagging dollar

Increasing political and economic uncertainties under the new Trump Administration, coupled with a sliding US dollar since the beginning of the year, have led to a sharp rise in gold prices for more than a month...


Gold pressured as dollar and equities remain supported

As the US dollar found some new life on Thursday and US equity markets hovered right around their new all-time highs, gold extended its recent pullback well below the $1200 handle. Since late December, the price of gold had been in a sharp relief rally from its 10-month lows around $1125 support...

Crude oil maintains bullish trend

Oil prices were initially weaker at the start of the new week, but they have now recovered to trade almost flat at the time of this writing. At the weekend, the OPEC and some producers outside of the group met to discuss the progress of their oil production deal...

Trump press conference fails to deter equity bulls

President-Elect Donald Trump spoke on Wednesday morning at his first formal press conference since the November elections, and the markets were all ears. Trump covered a lot of ground with multiple topics that included...


Gold ripe for potential relief rally

The charts tell a clear story of the unrelenting plunge in gold prices since early November. This steep dive has been the result of several related factors, all of which have the potential to extend well into the new year. These largely Trump-driven factors include...

Could EUR/USD finally break 1.05 on this FOMC day?

The market is demanding a rate rise and the Fed better deliver it today, for if it doesn’t the bank’s credibly will be severely damaged. There is really no excuse not to do so. Economic data has been improving, financial markets are calm...

Mixed Jobs Report Keeps High Fed Expectations Intact

As we noted the day before Friday’s US jobs report, only a significantly worse-than-expected reading for November would have likely made the Federal Reserve’s next interest rate decision more difficult...

  


Share: