March 15, 2024 09:29 GMT
Rengo Pay Tally Furthers Beds In Expectations of BoJ Hike
FOREX
- The final Rengo union pay tally in Japan took focus this morning, with the pay deal demand of 5.28% coming in ahead of expectations and allowing another piece of the BoJ puzzle to land in favour of a hike next week. Given the well-trailed intentions of the central bank (a JiJi report yesterday pointed heavily to the Bank preparing to exit NIRP next week), JPY failed to materially strengthen - with an expected commitment to continued bond-buying seen stabilising markets through the first potential Japanese rate hike for decades.
- Instead, USD/JPY printed new weekly highs in response, printing up at 148.83. This extends the recovery off the early March base, with the pair printing higher lows for five consecutive sessions and breaking back above the 50-dma.
- The EUR is the firmest performing currency so far Friday, but the USD is similarly firm - holding a large part of the post-PPI gains posted into the Thursday close. NZD is the poorest performing currency, helping aid EUR/NZD through the 200-dma and nearing the YTD highs of 1.7937.
- Prelim UMich sentiment data will be carefully watched for details on inflation expectations ahead of next week's Fed decision. Consensus currently looks for the 1yr inflation expectation to tick up to 3.1% from 3.0% prior. Import/Export price indices are also set to cross, with a speech also due from ECB Chief Economist Lane.
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