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JPY Volatility in Focus Post-BOJ, USD Index at Fresh Two-Week Low

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  • Global focus has been on the Japanese Yen on Friday, as the dust settles from an unchanged Bank of Japan decision overnight. Governor Ueda stated the yen's recent weakness has not affected underling inflation, which the Bank continue to watch closely.
  • Overall, this has paved the way for further JPY weakness on the session, with USDJPY printing a fresh multi-decade high of 156.82. There was a momentary sharp pullback to 154.99, with markets potentially getting spooked re MOF intervention but this move was quickly faded, with the pair tracking back above 156.50 as we approach the NY crossover.
  • Firmer equities in Europe are moderately bolstering risk sentiment, with the likes of AUD and NZD outperforming and the USD index printing a fresh two-week low below 105.50.
  • As such, AUDJPY is up 1% and EURJPY stand 0.70% in the green, with the latter piercing initial resistance at 168.25, the 1.50 projection of the Jan 1 - 19 - Feb 1 price swing.
  • EURUSD has edged to fresh highs, briefly printing above 1.0750. The market will monitor a clear break of the 20-day EMA (1.0726), which would signal scope for a stronger technical recovery.
  • US PCE Core Deflator crosses this afternoon, alongside personal income and spending figures. UMich consumer sentiment and inflation expectations round off the week’s data calendar. Potential for comments from ECB's Centeno, participating in a panel in Frankfurt.
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  • Global focus has been on the Japanese Yen on Friday, as the dust settles from an unchanged Bank of Japan decision overnight. Governor Ueda stated the yen's recent weakness has not affected underling inflation, which the Bank continue to watch closely.
  • Overall, this has paved the way for further JPY weakness on the session, with USDJPY printing a fresh multi-decade high of 156.82. There was a momentary sharp pullback to 154.99, with markets potentially getting spooked re MOF intervention but this move was quickly faded, with the pair tracking back above 156.50 as we approach the NY crossover.
  • Firmer equities in Europe are moderately bolstering risk sentiment, with the likes of AUD and NZD outperforming and the USD index printing a fresh two-week low below 105.50.
  • As such, AUDJPY is up 1% and EURJPY stand 0.70% in the green, with the latter piercing initial resistance at 168.25, the 1.50 projection of the Jan 1 - 19 - Feb 1 price swing.
  • EURUSD has edged to fresh highs, briefly printing above 1.0750. The market will monitor a clear break of the 20-day EMA (1.0726), which would signal scope for a stronger technical recovery.
  • US PCE Core Deflator crosses this afternoon, alongside personal income and spending figures. UMich consumer sentiment and inflation expectations round off the week’s data calendar. Potential for comments from ECB's Centeno, participating in a panel in Frankfurt.