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USD/JPY Through Y130 as BoJ Give The All Clear

FOREX
  • The Bank of Japan overnight gave the greenlight for further JPY weakness, as the board reinforced their message that yield curve control will be in place until the economy enters a sustainable recovery. This keeps the BoJ committed to easing policy going forward - running a starker contrast with Fed ahead of next week's FOMC decision.
  • The market response was to run USD/JPY through Y130.00 and to new cycle highs of Y130.96. The next upside level to watch in the pair crosses at the 131.96 mark - the 1.00 projection of the Feb 24 - Mar 28 - 31 price swing. Needless to say, JPY is comfortably the poorest performer in G10.
  • At the other end of the table, SEK is rallying as the Riksbank went against consensus and lifted interest rates to 0.25%. Furthermore, the repo rate projections outline a bank that now looks certain to hike further in June, with strong possibilities of further hikes in September, November as well as February next year. EUR/SEK extended its two-day decline, taking out the 200-dma support at 10.2793 in the process.
  • The Fed and Bank of England remain in their pre-rate decision blackout periods, meaning Thursday will likely be a quiet session for central bank speak - keeping focus on the recent market volatility and - in particular - the run higher in the dollar.
  • National German CPI data follows later today, as well as weekly jobless claims from the US and the advanced reading of Q1 GDP.
MNI London Bureau | +44 203-865-3809 | edward.hardy@marketnews.com
Energy BulletsCommoditiesBank of Japan (BOJ) Market News
MNI London Bureau | +44 203-865-3809 | edward.hardy@marketnews.com
Energy BulletsCommoditiesBank of Japan (BOJ) Market News

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