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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 the third worst performer in the G10 space for Tuesday's session. USD/JPY gained 0.73%, with the pair mostly supported post the Asia close on Tuesday. In NY trade we got to ~143.55, but sit back lower now, last around 142.80, -0.40% since the NY close. Fitch's downgrade of the US credit rating has weighed on USD sentiment in early trade today, particularly in terms of the traditional safe havens. CHF is also trading with a firmer bias (+0.30%).
- US equity futures are also lower in early trade today, while US bond futures have spiked.
- When S&P downgraded the US from AAA back in 2011 (on August 5), the yen rallied, see the chart below. We also saw broader risk off with US equities down during this period as well, which likely helped yen gains as well.
- The early weakness today in USD/JPY comes after breaking above several key resistance levels yesterday. We are still some distance from key EMAs, with the 20-day sitting back near 141.30. Further on the downside, key support has been defined at 138.07, the Jul 28 low.
- On the data front today we just have July monetary base data, which is unlikely to be a market mover. We also get the BoJ minutes from the June policy meeting.
Fig 1: USD/JPY Sank In Early August 2011 When S&P Cut The US Credit Rating
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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