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MNI is the leading provider
of intelligence and analysis on the Global Fixed Income, Foreign Exchange and Energy markets. We use an innovative combination of real-time analysis, deep fundamental research and journalism to provide unique and actionable insights for traders and investors. Our "All signal, no noise" approach drives an intelligence service that is succinct and timely, which is highly regarded by our time constrained client base.Our Head Office is in London with offices in Chicago, Washington and Beijing, as well as an on the ground presence in other major financial centres across the world.
JPY
Yen was again the best performing currency within the G10 space, rising a further 1.08% during Friday's session. This bought gains last week to 3.30%. The pair briefly got sub 127.50, fresh lows back to the end of May of last year. We stabilized somewhat into the close, and we track just above 127.80 currently.
- A clean break sub 127.50 leaves downside targets between 125.50-126.80, a combination of lows from last year and Fibonacci projection levels.
- The market focus remains on this week's BoJ meeting, which concludes on Wednesday. 1 week implied vol sits above 22%, which is fresh highs back to March 2020, (i.e. highest since the initial Covid surge).
- A further surprise can't be ruled out at this week's meeting. An ex BOJ aide stated the BoJ consider a YCC exit as early as this week's meeting, although it wouldn't represent a shift in the monetary policy stance (see this link for more details).
- Further BoJ bond purchases are expected today, as the central bank looks to push back against rising yields.
- On the data front today, Dec PPI is due (0.3% m/m, 9.5% y/y expected), while machine tool orders print later.
Fig 1: USD/JPY 1 week Implied Vol Spikes Ahead Of BoJ Meeting
Source: MNI - Market News/Bloomberg
Why MNI
MNI is the leading provider
of intelligence and analysis on the Global Fixed Income, Foreign Exchange and Energy markets. We use an innovative combination of real-time analysis, deep fundamental research and journalism to provide unique and actionable insights for traders and investors. Our "All signal, no noise" approach drives an intelligence service that is succinct and timely, which is highly regarded by our time constrained client base.Our Head Office is in London with offices in Chicago, Washington and Beijing, as well as an on the ground presence in other major financial centres across the world.
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