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JPY: USD/JPY Eyeing Weekly Lows, Ex-Fed Dudley Sees Strong Case For 50bps Cut

JPY
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USD/JPY is sub 141.00 in latest dealings, the pair around 0.70% stronger in yen terms, last close to 140.80/85. It is comfortably the best G10 FX performer so far today. Focus will be on earlier lows from this week at 140.71. Beyond that lies the 140.25 level (Dec 28 low from last year). 

  • Broader USD sentiment remains on the backfoot, with upticks in the BBDXY index sold by the market. The index last near session lows close to 1227.0.
  • Ex Fed official Bill Dudley has stated there is a strong case for a 50bps cut by the Fed at a forum in Singapore.
  • This has pushed 2yr yields to session lows near 3.5800%, but we remain above recent lows. Market expectations for a 50bps cut have crept higher since US trade, when media speculation on the issue picked up (WSJ & FT).
  • US-JP yield differentials remain skewed lower, and yen continues to exhibit strong sensitivity to US Tsy/shifting Fed expectations. 

 

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USD/JPY is sub 141.00 in latest dealings, the pair around 0.70% stronger in yen terms, last close to 140.80/85. It is comfortably the best G10 FX performer so far today. Focus will be on earlier lows from this week at 140.71. Beyond that lies the 140.25 level (Dec 28 low from last year). 

  • Broader USD sentiment remains on the backfoot, with upticks in the BBDXY index sold by the market. The index last near session lows close to 1227.0.
  • Ex Fed official Bill Dudley has stated there is a strong case for a 50bps cut by the Fed at a forum in Singapore.
  • This has pushed 2yr yields to session lows near 3.5800%, but we remain above recent lows. Market expectations for a 50bps cut have crept higher since US trade, when media speculation on the issue picked up (WSJ & FT).
  • US-JP yield differentials remain skewed lower, and yen continues to exhibit strong sensitivity to US Tsy/shifting Fed expectations.