Free Trial
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.
JPY
USD/JPY has continued to correct lower, comfortably below earlier lows in the week. We are now not too far away from the 20-day EMA (149.63). We haven't tested downside support at this level since early Feb, which ultimately proved to be a false break, see the chart below.
Fig 1: Spot USD/JPY Versus Key EMAs
Source: MNI - Market News/Bloomberg
- Yen is now up around 0.60% for the session, comfortably the strongest performer in the G10 space.
- This all follows from BoJ Board member Takata's hawkish speech earlier (see the update from our policy team here). JGB yields are higher, albeit more so at the back end.
- Potential BoJ exit could see renewed interest in USD/JPY downside. Interestingly, 1 month USD/JPY risk reversals have already turned sharply lower in recent weeks, see the chart below.
- Historically, we have typically seen a larger downside spot move in response to such trend shifts in the risk reversal space.
Fig 2: USD/JPY Versus 1 month Risk Reversal
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.
We are facing technical issues, please contact our team.
ok
Your request was sent sucessfully! Our team will contact you soon.
ok