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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 has tested below Friday lows in recent dealings, the pair last near 160.30/35 (today's lows at 160.26, versus Friday's at 160.35). Some EUR underperformance is likely aiding yen at the margins so far today. EUR/JPY sits off recent highs, last tracking near 173.60, against recent highs, which have been marked around 174.50.
- Fresh French political uncertainty is likely to be a near term focus point for French and EU markets, given the left's legislative win and a potential hung parliament. Still, for EUR/JPY we are some distance from the 20-day EMA (close to 172.00)
- For USD/JPY is it a similar backdrop. The 20-day EMA is back closer to 159.50. The 50-day EMA support point, which is back near 157.50, hasn't been meaningfully breached since March of this year.
- Today's modest US yield rise isn't benefiting USD/JPY, although the broader trends in recent weeks have been for yield spreads to move lower in US-JP terms, albeit with a degree of volatility, see the chart below.
- The outright levels still stand firmly in the USD's favor, but increased market pricing around rate cuts in H2 of this year may be chipping away at USD resilience.
- Locally, while the headline labour earnings data were weaker than forecast, the detail still showed firmer trends, particularly on a same sample basis.
Fig 1: USD/JPY Versus US-JP Nominal 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.
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