October 28, 2024 17:54 GMT
FOREX: Renewed JPY Pressure as US Yields Revisit the Highs
FOREX
- The renewed upward pressure on treasury yields throughout the US session has weighed on the FI sensitive Japanese yen, and the latest auction tails have helped USDJPY consolidate back above 153.20 in late session trade.
- As noted earlier, initial JPY pressure this week came following surprise weekend election results in Japan, in which Ishiba's LDP-led coalition lost their majority in parliament for the first time in 15 years - a result that's brought considerable uncertainty to Japanese politics.
- While USDJPY (+0.64%) remains a way off the session highs of 153.88, the latest bounce is supportive of the underlying bullish trend. A daily close above 153.40, (61.8% retracement of the downleg posted off the July 3rd high) will be monitored and current price action sets the scene for an extension towards 155.27, the 2.00 projection of the Sep 16 - 27 - 30 price swing.
- Single currency strength also sees EURJPY edging back closer to 166.00, currently up 0.84% on the day. The first resistance point currently resides at 166.53 (July 31 high) and above here, markets will focus on 168.01 (July 26 high).
- Elsewhere, fx markets have been contained ahead of the very busy data calendar this week, which includes Eurozone inflation and US employment. The Bank of Japan will also meet this week ahead of next week's US election.
- AUD is a notable underpeformer, down 0.38% as we approach the APAC crossover, potentially owing to oil prices, which have slumped around 5% on Monday, as the market takes some comfort from Israel striking military targets in Iran over the weekend, rather than oil or nuclear facilities, and some geopolitical risk premium is trimmed.
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