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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
The yen was the only G10 currency to rise against the dollar for Wednesday's session, up 0.6% to 133.35/40. We did get just below Monday session lows near 132.20, as the sharp sell-off in EU banks (-8.4%) drove strong JPY outperformance against the EU bloc of currencies.
- Reports that the Swiss authorities will provide liquidity to Credit Suisse if necessary stabilized sentiment to a degree. EUR/JPY hit lows at 139.48n, but we now sit back just above 141.00.
- The pair was still 2% lower for Wednesday's session after a record pull back in German yields. Yen rose 2.65% against CHF and 2.5% against NOK for the session.
- Broader risk appetite swings will likely dominate yen sentiment in the near term. 1 month risk reversals sit close to -2.00, we haven't spent too much time below this level in recent years (outside of the onset of the pandemic). 1 month implied vol is near 14% but is below recent highs.
- Locally, we have Feb trade data, core machine orders and weekly investment flow data.
- There may also be renewed focus on Japan banks given EU moves for Wednesday's session, although the chair of the Regional Banks Association played down fears of spillover to local banks post the SVB collapse yesterday.
Fig 1: USD/JPY 1 month Risk Reversal Close To Cyclical Lows
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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