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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
Yen gained around 0.5% against the USD for Tuesday's session. Slightly above the median for the G10 bloc, and outperforming the CHF noticeably (down -0.47%). Still, for USD/JPY, we couldn't generate much downside beyond the 130.50 level, with the pair largely range bound post the Asia close. The pair currently tracks in the 130.85/90 range.
- One factor which may have curbed downside momentum in the pair is the firmer US yield backdrop, with a noticeably gain in US cash Tsy 2yr yields for Tuesday's session (+13bps to 4.08%).
- Still, the chart below shows a modest wedge is evident between USD/JPY and 2yr yield levels, with yen levels too strong. Again though, month end and fiscal year end could be aiding yen from a flow standpoint.
- Broader USD sentiment also remained softer, which may have spilled over to the yen to some degree.
- In the vol space, the 1 month edged down slightly, now to 11.84%, while the risk reversal recovered slightly higher to -1.49. The local data calendar is empty today.
Fig 1: USD/JPY Versus US 2yr Yield (Past Month)
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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