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FOREX: JPY Rate Checks Keep Markets Volatile, But EUR/JPY Recovers Well

FOREX
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  • After yesterday's suspected official intervention in the JPY, markets were volatile again overnight, with supposed rate checks from the BoJ in EUR/JPY keeping markets on edge. The cross printed a new pullback low of 171.52 on the rate check, however prices have recovered well across Friday morning trade.
  • USD/JPY's slide yesterday exposed key support in the pair at the 50-dma of 157.81 - a level pierced, but not convincingly broken yet this week. A particularly USD negative reaction to today's data releases will further raise concerns that the authorities could sell again into an already soft market.
  • Antipodean currencies are outperforming, with AUD and NZD firmer against all others. A more solid equity backdrop is supporting high beta currencies, with core Europe cash markets and US futures all trading in positive territory ahead of the key earnings releases later today - Citigroup, JPMorgan, Wells Fargo and BNY Mellon are all set to report ahead of the open today. 
  • Yesterday's softer-than-expected CPI print will be weighing on market's minds ahead of the PPI release later today, after which markets will have a much better idea of shape of PCE headed into the next Fed meeting at the end of July. Fed rates pricing continues to eye the September meeting as the most likely turning point for interest rates. 
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  • After yesterday's suspected official intervention in the JPY, markets were volatile again overnight, with supposed rate checks from the BoJ in EUR/JPY keeping markets on edge. The cross printed a new pullback low of 171.52 on the rate check, however prices have recovered well across Friday morning trade.
  • USD/JPY's slide yesterday exposed key support in the pair at the 50-dma of 157.81 - a level pierced, but not convincingly broken yet this week. A particularly USD negative reaction to today's data releases will further raise concerns that the authorities could sell again into an already soft market.
  • Antipodean currencies are outperforming, with AUD and NZD firmer against all others. A more solid equity backdrop is supporting high beta currencies, with core Europe cash markets and US futures all trading in positive territory ahead of the key earnings releases later today - Citigroup, JPMorgan, Wells Fargo and BNY Mellon are all set to report ahead of the open today. 
  • Yesterday's softer-than-expected CPI print will be weighing on market's minds ahead of the PPI release later today, after which markets will have a much better idea of shape of PCE headed into the next Fed meeting at the end of July. Fed rates pricing continues to eye the September meeting as the most likely turning point for interest rates.