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FOREX: AUDJPY Extends Declines to 1.00%, EURJPY Tests Below 156.00

FOREX
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  • Friday’s session has been a tale of two halves for EURJPY. Initial comments from BOJ Governor Ueda sparked an impressive relief rally for Cross/JPY, as he told parliament the Bank would buy bonds nimbly should yields rise sharply. EURJPY rose sharply higher in tandem, reaching an intra-day high of 158.22.
  • However, a multitude of factors have prompted a sharp turnaround, with the cross now testing below the 156.00 mark ahead of the weekend close. The weaker-than-expected French services PMI set the tone for the single currency, and the late weakness for major US equity benchmarks has underpinned the souring risk sentiment, weighing specifically on EURJPY. Price action has been exacerbated by the lower US yields following the soft US data, President Trump proclaiming that it is not important for Zelenskiy to be at the peace talks, and desks citing late reports of “new” coronavirus concerns all adding pressure.
  • As such, USDJPY has also slipped to a fresh session low below 149.00, keeping the bearish sentiment for the pair in focus. Price action this week has seen spot narrow the gap substantially to 148.65, a key support.
  • Broad risk off is weighing on the likes of AUD, NZD and CAD, all exhibiting losses of around 0.5% and underperforming the more moderate declines for EUR and GBP. AUDJPY losses are now totalling 1% on the session. Risk-off in emerging market FX has been less evident, with the lower treasury yields likely offsetting somewhat.
  • German elections take focus over the weekend, before New Zealand retail sales and German IFO data cross. There is a public holiday in Japan Monday.
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  • Friday’s session has been a tale of two halves for EURJPY. Initial comments from BOJ Governor Ueda sparked an impressive relief rally for Cross/JPY, as he told parliament the Bank would buy bonds nimbly should yields rise sharply. EURJPY rose sharply higher in tandem, reaching an intra-day high of 158.22.
  • However, a multitude of factors have prompted a sharp turnaround, with the cross now testing below the 156.00 mark ahead of the weekend close. The weaker-than-expected French services PMI set the tone for the single currency, and the late weakness for major US equity benchmarks has underpinned the souring risk sentiment, weighing specifically on EURJPY. Price action has been exacerbated by the lower US yields following the soft US data, President Trump proclaiming that it is not important for Zelenskiy to be at the peace talks, and desks citing late reports of “new” coronavirus concerns all adding pressure.
  • As such, USDJPY has also slipped to a fresh session low below 149.00, keeping the bearish sentiment for the pair in focus. Price action this week has seen spot narrow the gap substantially to 148.65, a key support.
  • Broad risk off is weighing on the likes of AUD, NZD and CAD, all exhibiting losses of around 0.5% and underperforming the more moderate declines for EUR and GBP. AUDJPY losses are now totalling 1% on the session. Risk-off in emerging market FX has been less evident, with the lower treasury yields likely offsetting somewhat.
  • German elections take focus over the weekend, before New Zealand retail sales and German IFO data cross. There is a public holiday in Japan Monday.