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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 was comfortably the best performer in the G10 space for Thursday's session, gaining nearly 0.50% against the USD. Moves above 146.00 post the Asia close were faded by the market, while in NY trade the pair fell under the 145.50 level (hitting a low around ~145.35). We sit slightly higher now, last in the 145.50/55 region.
- Technically, Thursday's pullback is still considered corrective. Support to watch on the downside lies at 145.01, the 20-day EMA. MA studies remain in bull mode condition, with upside focus on 147.49, a Fibonacci projection and the next objective.
- Yen benefited from the broad pull back in core yields and softer equity tone, particularly against the EUR. EUR/JPY fell 1.20% to 157.80, in the process, the pair has pierced initial support at the 20-day EMA, intersecting today at 158.06. More notable support comes into play between 156.87 and 156.42, the Aug 23 low and the 50-day EMA. Slightly dovish ECB comments also helped.
- USD/JPY is tracking more in line with the US-JP 10yr swap spread, as we noted yesterday, the pair looked too high relative to such trends, although a wedge still persists, see the updated chart below.
- On the data front today we have Q2 GDP inputs in terms of capital spending and company profits. The final August read for the manufacturing PMI is also out.
Fig 1: USD/JPY Versus US-JP 10-year Swap Rate Differential
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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