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 is up from earlier lows. The pair got to 159.19 not long before the Tokyo fix. We sit near 159.35/40 in recent dealings, still around 0.15% lower versus end NY levels from Monday. Intra-session lows form yesterday rest at 158.82.
- Like elsewhere, the pair received some support post the USD/CNY fixing, which was set at fresh highs back to Nov last year.
- Cross asset moves are muted elsewhere though. US equity futures sit a touch higher, while US yields are close to unchanged. Regional equities are mixed as well.
- More broadly, USD/JPY is too high relative to softer US-JP yield differentials, see the chart below. The 10yr nominal government bond yield differential is back close to early Feb lows near +324bps.
- Still, risk reversals remain elevated relative to recent history. The 1 month is near -0.60, close to YTD highs. The 6 month is near -0.41 (levels last seen in 2022). The 1yr is around -0.19, also fresh highs back to 2022. Whilst we aren't above par levels, the trend has been shifting this way in recent weeks.
- In a relative sense, implied vols are up from recent lows, but still comfortably off 2024 highs.
Fig 1: USD/JPY Diverging Somewhat From Lower US-JP Yield Differentials
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