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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
USD/JPY stabilises after a spectacular collapse over the final two sessions of last week, as the moderation in Fed rate hike bets tested the limits of shorting the yen.
- U.S./Japan yield spreads have shrunk over the past few weeks. 10-year yield gap was 246bp come the end of play last Friday, while 2-year spread was 296bp.
- Spot USD/JPY tumbled through its 50-DMA and closed below there for the first time since March, plumbing multi-week lows in the process.
- The rate has added 24 pips so far to last trade at Y133.51 as the greenback has found poise. E-minis trade in the red but Nikkei 225 futures point to a higher re-open.
- From a technical standpoint, bulls need a clearance of Jul 27 high of Y137.46 before targeting Jul 21 high of Y138.88. Conversely, bearish focus falls on key support from Jun 16 low of Y131.50.
- The subcommittee of Japan's Central Minimum Wage Council is planning to recommend raising the nationwide average minimum wage by Y30/hour or more, Mainichi reported. This would represent the largest minimum wage hike ever.
- Final Jibun Bank M'fing PMI headlines the domestic data docket today. Looking further afield, household spending/earnings data will be out on Friday.
Fig. 1: USD/JPY vs. U.S./Japan 2-Year 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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