March 25, 2022 09:13 GMT
- After several sessions of distinct underperformance and weakness, the JPY is solidly higher early Friday. The moves follow the BoJ failing to act as 10-year JGB yields hit 0.23%. A break above that level triggered BoJ fixed rate operations back in Feb as the central bank sought to defend the upper end of permitted 10-Year yield trading range (-/+0.25%). There was speculation that the level could again act as a trigger for BoJ intervention but the central bank chose to stay on the sidelines today.
- Elsewhere, GBP trades poorly after a particularly weak set of retail sales figures, with sales unexpectedly dropping in the month of February. The weight on sales was led by a sharp drop in online activity, with spending instead favouring in-person consumption and clothing and footwear as COVID restrictions were relaxed. After starting the overnight session strong, GBP/USD has faded, putting Thursday's lows under pressure at 1.3157. A break below here opens firmer support seen into 1.3120.
- The greenback is more mixed, with the USD Index holding inside the recent range as markets watch for any further signs of tentative progress in a resolution for the Ukraine Crisis. Reports continue to suggest an element of progression between Russian and Ukrainian negotiators, with traders now watching for anything more concrete on a potential ceasefire agreement.
- The data slate is relatively light, with just the final revision to March's UMich Sentiment data and pending home sales on the docket. Fedspeak remains thick and fast, with the highlight today being Williams, who speaks at 1400GMT/1000ET directly on monetary policy. Barkin, Waller and the BoC deputy governor Kozicki also make appearances.