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MNI EUROPEAN MARKETS ANALYSIS: Yen & JGB Yields Firm On BOJ Exit Speculation

  • The JPY and JGB yields are firmer today, with a number of factors lending support- stronger Jan wages data, a large union announcing larger pay increases this year versus last year, while BBG noted some Japan government officials are in favor of a near term BoJ shift (although Mar versus Apr wasn't specified). BoJ speak also noted steady progress towards the 2% inflation goal.
  • USD/JPY dipped below its 50-day EMA but has since recovered some ground. JGB futures are weaker and near session lows, -25 compared to settlement levels.
  • Broader USD sentiment was mostly softer. Gold prices made a fresh high above $2160 before moderating. US Treasury yields are 1-2bps higher today, but this hasn't impacted sentiment.
  • Later Fed Chair Powell testifies before Congress and Mester speaks on the economic outlook. In terms of US data, there are February Challenger job cuts, jobless claims and January trade. The ECB decision is announced including updated forecasts and press conference.

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  • The JPY and JGB yields are firmer today, with a number of factors lending support- stronger Jan wages data, a large union announcing larger pay increases this year versus last year, while BBG noted some Japan government officials are in favor of a near term BoJ shift (although Mar versus Apr wasn't specified). BoJ speak also noted steady progress towards the 2% inflation goal.
  • USD/JPY dipped below its 50-day EMA but has since recovered some ground. JGB futures are weaker and near session lows, -25 compared to settlement levels.
  • Broader USD sentiment was mostly softer. Gold prices made a fresh high above $2160 before moderating. US Treasury yields are 1-2bps higher today, but this hasn't impacted sentiment.
  • Later Fed Chair Powell testifies before Congress and Mester speaks on the economic outlook. In terms of US data, there are February Challenger job cuts, jobless claims and January trade. The ECB decision is announced including updated forecasts and press conference.

Keep reading...Show less