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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
The yen was the weakest performer in the G10 space for Monday's session. Despite the sharp pull back in US yields, the yen finished Monday's session down slightly against the USD. We did move off session highs (134.70/75) in NY trade, moving back to 134.20. We have opened with an offered tone for Tuesday, the pair back to 134.00/05.
- USD/JPY still followed the broad trajectory to US yields, see the chart below, but at face value looks a little high at current levels relative to the US 2yr.
- Yesterday's comments in parliament by new BoJ Governor Ueda suggested Friday's BoJ policy announcement was unlikely to surprise the market. This was already the rough market consensus, but may have weighed on yen sentiment at the margins.
- We noted yesterday the yen has tended to strengthen heading into recent BoJ meetings, but there is less evident of this transpiring as we head into Friday's outcome. Note large local insurer, Nippon Life, doesn't expect YCC changes until the June meeting.
- In the vol space, 1 week is above 12% but well below 2023 highs, signifying less excitement heading into the BoJ meeting.
- On the data front today, we have PPI for Mar (market expects +1.7% y/y, prior was 1.8%). Note also nationwide and Tokyo department store sales will print.
Fig 1: USD/JPY Versus US 2yr Yield
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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