Tag Archive: Bank of Japan

BOJ Appears to have Intervened last Friday Too, but Market Sells Yen Anyway

2024-07-16

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2024-07-16

Jury duty assignment prevents a more comprehensive note, but here is a snapshot. Overview: The US dollar is consolidating in narrow ranges against most of the G10 currencies. The Australian and New Zealand dollars, along with the Japanese yen are off by about 0.25%, but the others are +/- 0.10. The latest BOJ data appears to imply that officials intervened not only last Thursday, but Friday as well. Emerging market currencies are mixed but mostly...

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Market Takes JPY Lower Despite Intervention Speculation, While Sterling Shines

2024-07-12

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2024-07-12

Overview: The dollar is mostly consolidating yesterday's CPI-inspired decline. The main features include the market bidding the US dollar back above JPY159 despite more speculation that the BOJ did in fact intervene yesterday and checked on the euro-yen cross in the local session today, and unexpectedly soft Swedish inflation, which the swaps market says could spur three rate cuts here in second half. A record trade surplus and strong aggregate...

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No Turn Around Tuesday as Greenback Remains Firm

2024-07-02

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2024-07-02

Taking the next few days off.  Will be back with week ahead commentary on  July 6.  Overview: The sharp jump in US long-term interest rates has helped lift the greenback in recent sessions and it remains firm against most of the G10 currencies today. The Canadian dollar is the best performer, and it is nearly flat. The intraday momentum indicators warn that after a mostly consolidative Asia Pacific and European morning, the greenback may probe...

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Nervous Calm Hangs over the Markets

2024-06-25

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2024-06-25

Overview:  San Francisco Federal Reserve President Daly spoke aloud what many are thinking. The US labor market may be at an inflection point. The four-week moving average of weekly jobless claims is at the highest since last September and the early call for July nonfarm payrolls is about 185k, which if true, would be a sub-200k reading for the second time in three months. The high-flying Nvidia has fallen 13% in the past three sessions coming into...

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Self-Inflicted Wounds in Europe and Japan Help the Greenback Shrug Off the Drag of Lower Rates

2024-06-14

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2024-06-14

Overview: The dollar is bid. What makes its performance standout is that it is taking place as US rates have fallen. The US 10-year yield is near 4.20%, the lowest in more than two months. The two-year yield is near 4.67%. It has fallen every session this week for a cumulative decline of more than 20 bp. It is not so much that constructive developments took week, but that Europe and Japan are suffering from self-inflicted injury. Macron's call for...

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Euro Sold After EU Parliament Elections and Macron’s Gambit

2024-06-10

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2024-06-10

Overview:  With mixed elements, the market took the US jobs data as relatively strong and took the dollar and US rates higher. The EU Parliament election has shaken up European politics, with the Belgium government collapsing and French President Macron calling a snap legislative election for the end of the month. Holidays in China, Hong Kong, Taiwan, and Australia made for thinner Asia Pacific trading, but the euro was sold and has reached to...

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Powell, PPI, and US Tariff Announcement on China Featured

2024-05-14

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2024-05-14

Overview: The tone in the foreign exchange market today is mostly consolidative. The two notable exceptions are the yen and yuan. Despite higher JGBs yields amid speculation that the BOJ will scale back bond purchases, as it did yesterday, to support the yen, the greenback is at its best level since the suspected intervention. The next important technical area is near JPY157.00. The US is set to announce a new set of tariffs on a wide range of...

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Yen Slips, Yuan Jumps, Dollar is Mostly Softer

2024-05-06

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2024-05-06

Overview: The dollar is mostly a little softer today in thin market conditions, with Tokyo, Seoul, and London closed for holidays. The Japanese yen is the weakest G10 currency, losing about 0.5% and slipping through last Friday's lows. At first, after Fed Chair Powell did not endorse rate hike speculation, the market thought he was dovish. But after the softer than expected jobs data and weakness in the ISM services, the market shifted from...

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May Day Fed Day

2024-05-01

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2024-05-01

Overview: Much of Asia and Europe are off for the May Day labor holiday. The dollar is mostly softer in the thin activity. However, the dollar has edged higher against the yen and approached JPY158. The euro initially fell to $1.0650, a six-day low and where a billion euros in options expire later today. It has recovered to almost $1.0675. Emerging market currencies are subdued. Central European currencies, the South African rand, and Mexican peso...

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Gold, Oil, and Interest Rates Rise

2024-04-02

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2024-04-02

Overview:  The market put more weight on the rise in the US ISM manufacturing survey than the downward revision to the manufacturing PMI and the unexpected back-to-back decline in construction spending. US rates shot up and lifted the greenback. The Dollar Index made a new high for the year, a little above 105, which had been anticipated by the new lows recorded by the Bannockburn World Currency Index (a GDP-weighted basket of the currencies of...

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Waller Pushes on Open Door: Push for Patience Lifts the Dollar, Complicating Japanese Efforts

2024-03-28

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2024-03-28

Overview: Comments by Fed Governor Waller, urging patience on rates and wanting more evidence that price pressures are moderating has helped the greenback extend its recent gains. The yen is the notable exception as the fear of intervention has restrained the dollar bulls. Poor German data, including a sharp 1.9% drop in February retail sales, the fourth consecutive monthly decline, underscored the euro's negative divergence, and the single...

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Dollar Extends Gains Against the Yen but Broadly Firmer Ahead of the FOMC

2024-03-20

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2024-03-20

Overview: The US dollar remains bid ahead of the outcome of today's FOMC meeting. No change in policy is expected, but the forward guidance, partly delivered in the updated projections, is the focus. In the last iteration (December), the Fed "dot" was for three rate cuts this year. Japanese markets were closed for a national holiday today but dollar's gains against the yen have been extended and the greenback is nearing the peak seen in...

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Greenback Surges after BOJ Hikes and Ends YCC and RBA Delivers a Dovish Hold

2024-03-19

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2024-03-19

The US dollar is surging today against most of the G10 currencies, and although the intraday momentum is stretched ahead of start of the North American session, there may be little incentive to resist before the end of the FOMC meeting tomorrow.

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Heightened Speculation of a BOJ Move Tomorrow did not Stop the Nikkei from Rallying or Yen from Slipping

2024-03-18

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2024-03-18

Overview: The US dollar is trading with a mostly softer bias against the G10 currencies. The notable exceptions are the Japanese yen and Swiss franc. Ironically, speculation of a Bank of Japan rate hike appears to have increased, while there is a risk that the Swiss National Bank cuts rates this week. The Norwegian krone is the strongest of the major currencies. The central bank meets later this week but is widely expected to stand pat. The...

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Consolidation Featured Ahead of Tomorrow’s US Retail Sales and Friday’s Japanese Wage News

2024-03-13

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2024-03-13

Overview: We came into this week expecting the dollar to rise on the back of a recovery in rates. The two-year note has risen from 4.40% after the jobs report to 4.60%. The dollar's rise has been less impressive.

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Ueda’s Comments Knock the Yen Back, while the Euro Flirts with $1.08

2024-03-01

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2024-03-01

Overview: The US dollar is mixed today. The dollar-bloc currencies and the Scandis are enjoying a slightly firmer tone, while the euro and sterling are edging higher in European turnover.

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Yen Pops on BOJ Comments on Inflation, but the Dollar holds Most of Yesterday’s Gains against the other G10 Currencies

2024-02-29

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2024-02-29

The dollar is mixed as the market awaits the US personal consumption expenditure deflator, which is the measure of inflation the Fed targets. While there is headline risk, we argue that the signal has already been generated by the CPI and PPI releases.

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Weak US Durable Goods may Herald Pullback in Capex

2024-02-27

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2024-02-27

Most of the G10 currencies are trading quietly in narrow ranges today. After a slightly firmer than expected national CPI reading, which still moderated, and a pullback in US yields, the Japanese yen is the strongest of the major currencies.

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USD Looks Oversold on Intraday Basis Ahead of a Possible Risk-Off North American Session

2024-01-26

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2024-01-26

Overview:  The US dollar is trading lower against most currencies, but the intraday momentum indicators are stretched, suggesting the selling pressure may not be sustained through in North America today. December US personal income and consumption data was contained in yesterday's Q4 23 GDP data, but the market want to see the monthly print, which is expected to see the core measure ease with the headline rate flat. Tokyo's January CPI was much...

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BOJ Stands Pat, Exit Draws Closer, while HK Liquidity is Squeezed Easing Pressure on the Yuan

2024-01-23

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2024-01-23

Overview:  The dollar remains largely confined to its recent ranges as the consolidative phase extends. The Bank of Japan stood pat and revised its forecasts as it is seen drawing closer another adjustment in policy, with the market still favoring an April timeframe. A squeeze in the Hong Kong money market and talk of a large package to support the equity market helped lift the Chinese yuan for the third consecutive session and lifted Chinese...

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