BOJ NAKAMURA DISSENTS RATE HIKE

BOJ MEDIAN FY25 CORE CPI +2.4% VS. OCT +1.9%

BOJ SEES UPSIDE RISK TO PRICES FOR FY2024, 2025

MNI:PBOC Net Drains CNY795Bn Via MLF; Injects CNY179Bn Repo

MNI: PBOC Sets Yuan Parity Lower At 7.1705 Fri; -1.62% Y/Y

MNI CBRT WATCH: Turkey CenBank Cuts 1W Repo 250Bps As Expected

MNI: UK JAN GFK CONSUMER CONFIDENCE INDEX -22

MNI: UK JAN GFK CONSUMER CONFIDENCE -22

MNI JAPAN DEC CORE CPI +3.0% Y/Y; NOV +2.7%

MNI EXCLUSIVE: EU-Mercosur Deal Close, But Likely Short-Lived - Officials

AUSTRALIA: 2025 Election Outcome Looking More Uncertain According To Newspoll

© 1982-2025 MNI. All rights reserved.
Terms | Privacy
Log Out
Free Trial

FOREX: USD Weakness Prevails After Contained Session, BOJ Up Next

FOREX
EM BulletBulletMarketsFixed Income BulletsForeign Exchange Bullets
  • Overall, currency markets traded in relatively contained ranges on Thursday as they awaited remarks from President Trump, participating online at the World Economic Forum. As comments started to filter through, a very sudden spike higher for the dollar was met with an immediate reversal, highlighting the ongoing sensitivity across FX markets to any comments from the President. Following this, the greenback drifted lower, and the USD index sits around 0.15% in the red as we approach the APAC crossover.
  • Most notable weakness in G10 is seen for USDJPY, down 0.37%. However, given Wednesday’s punchy recovery, the pair resides just above mid-range for the week around the 156.00 handle. The decline is noteworthy given the close proximity to the Bank of Japan decision, due overnight. Expectations are that the BOJ will move further along its policy normalisation path, with both market consensus and MNI analysis suggesting a 25bps rate hike as the most likely outcome. In the January Outlook Report, we expect the BoJ to maintain its economic growth forecast but slightly raise its inflation outlook.
  • GBP also showed some outperformance as cable rose back above 1.2350 amid with related strength at the short end of the UK curve as Chancellor Reeves announced some relaxation to proposed non-dom tax regime changes. A clear break of the tested 20-day EMA would highlight a stronger corrective phase for GBPUSD and signal scope for an extension, possibly towards the 50-day EMA, at 1.2529.
  • In emerging markets, both the Brazilian real and the Mexican peso rallied strongly again, with the former extending a clean break below the 6.00 handle during Wednesday's session.
  • Alongside the BOJ, the Eurozone data calendar is headlined by the January flash PMIs on Friday. Data will help set the tone for sentiment heading into 2025, with questions still remaining around the likely pace and magnitude of ECB rate cuts later this year.
307 words

To read the full story

Close

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.
  • Overall, currency markets traded in relatively contained ranges on Thursday as they awaited remarks from President Trump, participating online at the World Economic Forum. As comments started to filter through, a very sudden spike higher for the dollar was met with an immediate reversal, highlighting the ongoing sensitivity across FX markets to any comments from the President. Following this, the greenback drifted lower, and the USD index sits around 0.15% in the red as we approach the APAC crossover.
  • Most notable weakness in G10 is seen for USDJPY, down 0.37%. However, given Wednesday’s punchy recovery, the pair resides just above mid-range for the week around the 156.00 handle. The decline is noteworthy given the close proximity to the Bank of Japan decision, due overnight. Expectations are that the BOJ will move further along its policy normalisation path, with both market consensus and MNI analysis suggesting a 25bps rate hike as the most likely outcome. In the January Outlook Report, we expect the BoJ to maintain its economic growth forecast but slightly raise its inflation outlook.
  • GBP also showed some outperformance as cable rose back above 1.2350 amid with related strength at the short end of the UK curve as Chancellor Reeves announced some relaxation to proposed non-dom tax regime changes. A clear break of the tested 20-day EMA would highlight a stronger corrective phase for GBPUSD and signal scope for an extension, possibly towards the 50-day EMA, at 1.2529.
  • In emerging markets, both the Brazilian real and the Mexican peso rallied strongly again, with the former extending a clean break below the 6.00 handle during Wednesday's session.
  • Alongside the BOJ, the Eurozone data calendar is headlined by the January flash PMIs on Friday. Data will help set the tone for sentiment heading into 2025, with questions still remaining around the likely pace and magnitude of ECB rate cuts later this year.