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JPY at New Highs on Fresh Hike Chatter, ECB Members Coalesce Around June

FOREX
  • After a quiet start to Friday trade, JPY is once again the best performer in G10 - tipping USD/JPY over 300 pips off the mid-week high. JPY added to recent gains on the back of concurrent BoJ sources reports from both JiJi News and Reuters - who eye the possibility of a March BoJ rate hike should the wage negotiation phase with unions next week continue to show signs of healthy wage growth. USD/JPY traded well through overnight Asia-Pac lows to extend losses off the weekly high to over 320 pips. A close at current or lower levels would confirm a clean break of both the 50- and 100-dma supports and a print through 146.24 would fully reverse the NFP-inspired rally.
  • EUR/JPY pull back was a touch shallower after the cross found support at the 50-dma (160.61 today) - highlighting that USD weakness is also playing a part.
  • The single currency is seen softer - weaker against most others - with ECB members out in force this morning following Lagarde's press conference yesterday. Members are coalescing around the June meeting for the first potential ECB rate cut - communication that is inline with market pricing. EUR/GBP has printed a new weekly low this morning, rejected yesterday's early test on 50-dma resistance at 0.8564. Next notable support a little way off, but weakness through 0.8498 would be bearish - exposing the cross to last August's low and the bear trigger at 0.8493.
  • Nonfarm payrolls data ahead takes focus, with markets expecting payrolls growth to slow to 200k from January's bumper 353k reading. The unemployment rate is expected to come in unchanged at 3.7%. Central bank speak is seen quieter into US hours, with just Fed's Williams scheduled to appear at a moderate discussion just ahead of the US open.
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