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Underperforms On Some Crosses Amid Buoyant Equity Mood, USD/JPY Close To Highs

JPY

USD/JPY stayed on the front foot post the Asia close on Wednesday. We got just above 161.80 in US trade, but sit back near 161.60 in early Thursday dealings. Yen lost 0.22% for Wednesday session, in what was a mixed session across the G10. The BBDXY and DXY finished around 0.1% lower thanks to GBP and EUR gains, but yen losses were comfortably sub NZD and NOK falls.

  • Bank of England’s Pill provided no explicit signals for an August cut, which aided GBP outperformance. GBP/JPY reached fresh highs back to 2008 (the pair last near 207.70).
  • In the cross asset space, US yields finished down, but losses were less than 1bps for most benchmarks. We didn't learn much from Powell's second round of testimony.
  • For the yen though, the buoyant equity mood, with both US and EU markets posting +1% gains, kept risk appetite supported, albeit more so against GBP and EUR from a cross perspective.
  • For USD/JPY, little has changed in terms of technicals, with recent highs (161.95, July 3) within sight, beyond that is 162.21, a projection level. The 20-day EMA is back at 159.89.
  • Locally, focus remains on the BoJ taper plans, although no clear consensus is emerging from key stake holders (see this BBG link for more details).
  • Today we have offshore weekly investment flows, along with core machine orders on tap and Tokyo office vacancies. In the option expiry space, note the following for NY cut later: Y161.00($1.5bln), Y161.50($514mln), Y162.25-35($715mln).
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USD/JPY stayed on the front foot post the Asia close on Wednesday. We got just above 161.80 in US trade, but sit back near 161.60 in early Thursday dealings. Yen lost 0.22% for Wednesday session, in what was a mixed session across the G10. The BBDXY and DXY finished around 0.1% lower thanks to GBP and EUR gains, but yen losses were comfortably sub NZD and NOK falls.

  • Bank of England’s Pill provided no explicit signals for an August cut, which aided GBP outperformance. GBP/JPY reached fresh highs back to 2008 (the pair last near 207.70).
  • In the cross asset space, US yields finished down, but losses were less than 1bps for most benchmarks. We didn't learn much from Powell's second round of testimony.
  • For the yen though, the buoyant equity mood, with both US and EU markets posting +1% gains, kept risk appetite supported, albeit more so against GBP and EUR from a cross perspective.
  • For USD/JPY, little has changed in terms of technicals, with recent highs (161.95, July 3) within sight, beyond that is 162.21, a projection level. The 20-day EMA is back at 159.89.
  • Locally, focus remains on the BoJ taper plans, although no clear consensus is emerging from key stake holders (see this BBG link for more details).
  • Today we have offshore weekly investment flows, along with core machine orders on tap and Tokyo office vacancies. In the option expiry space, note the following for NY cut later: Y161.00($1.5bln), Y161.50($514mln), Y162.25-35($715mln).