JPY news - page 4
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USDJPY surges back above 117.00 Blink and you miss it still as the 2016 volatility continues USDJPY has jumped from 116.60 to 117.10 after strong demand noted below 116.50
Yesterday the BOJ said they are monitoring markets and we can't rule out a few enquiries/calls to banks on that dip even if no intervention per se.
European equity markets holding initial gains so a little risk-on appetite also adding to yen losses with oil finding a base too for the moment.
The speed of that USDJPY move though points the conspiracy finger at greater powers.
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USD/JPY forecast for the week of January 25, 2016 The USD/JPY pair initially fell during the week, but turned back around to break well above the 118.50 level. This is a bullish candle, but beyond that we broke above the top of the shooting star that formed the previous week. With that being the case, the market looks as if it is picking of bullish pressure and that we should continue to go higher. On a break above the top of the weekly candle, we are buyers but we also recognize that there could be a lot of noise above to keep this market fairly volatile.
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Japan data: December trade balance surplus of Y 140.2bn (expected Y 117bn) Japan trade balance for December The trade balance was slow to hit, but out now. Comes in at a surplus of 140.2bn yen
Exports -8.0% y/y
Exports have their biggest y/y decline since September of 2012
Imports -18.0% y/y
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More detail in the data, this is quick info via Reuters:
External demand woes still weighing
And .. imports down also, greater fall than expected. Maybe some domestic demand woes showing here.
There isn't much the Bank of Japan can do about external demand, but more easing will be their recipe if they think it will improve domestic demand. Now is not the time for me to go into the bigger issues facing Japan ... did someone say 'demographics'? The Bank of Japan doesn't have much influence in that area (i.e. none ;-) )
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USD/JPY Could Drop To 117 Post-BoJ - BTMU BoJ is unlikely to announce any changes to monetary policy tomorrow offering support for the yen given that easing expectations have built up over the last week, projects Bank of Tokyo Mitsubishi UFJ (BTMU).
"USD/JPY could drop back to the 117 level after the meeting.We will be watching closely comments from Governor Kuroda for any signal that the BoJ is moving closer to easing again this year which could dampen potential yen upside.
Further evidence that the US economy has recently lost some growth momentum could weigh as well on USD/JPY in the week ahead. Market liquidity may be thinner next week ahead of the Chinese New Year," BTMU adds.
USD/JPY: Yen Hammered By Negative Rate Introduction The Japanese yen digested the Bank of Japan's (BoJ) surprising move to cut the policy rate into negative territory and consolidated above ¥120 on Friday.
Japan's central bank said it would now charge commercial banks 0.1% to hold funds with them, a move which is aimed at increasing lending, spurring growth and generating inflationary pressures.
The kneejerk reaction to the announcement was a violent plunge of some 260 pips to ¥121.41 - a more than one-month low. Although it seemed that the yen would correct the losses shortly after the announcement, the USD/JPY was unable to return below the $120 handle. After the close of Japanese markets the yen was seen 1.73% lower at ¥120.86.
Concerns had been mounting that the BoJ were increasingly tapped out in their ability to ease monetary policy any further, and today’s 5-4 decision shows how bitter the divide between hawks and doves is at the BoJ. The announcement opens the door to sustained further easing by the central bank throughout the year.
The Japanese data released today underlined the reasoning behind the BoJ’s decision. Inflation has fallen away dramatically with ex-food and energy CPI seeing its first monthly decline since January 2015. Japan's core CPI glided along at a steady rate of 0.1% year-on-year in December, while Tokyo's more timely CPI measure fell 0.1% in January, hitting its lowest level since April 2013.
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The USD/JPY pair broke down during the course of the week initially, but turned back around as the Bank of Japan suggested that more quantitative easing was coming. With that being the case, it’s very likely that we continue to go higher this week, and now that we’ve cleared the 118.50 level, it is very likely that we could go as high as 123 over the next several candles. We have no interest whatsoever in shorting this market now, and believe that we will continue higher sooner or later.
USD/JPY: Pair Trades Lower in Volatile Session The USD/JPY pair slid on Wednesday and was spotted 0.3% lower at ¥119.60, but it trimmed some of the losses as the intraday low stands at ¥119.25.
Later in the day, some important US data are due, starting with the ADP employment report for January, which should moderate from 257,000 to 193,000. The services PMI for January is projected to fall to 53.7 from December's 54.3, while ISM's non-manufacturing gauge is expected to tick lower to 55.1 from 55.3.
The yen was erasing Friday's losses, seen after the Bank of Japan surprisingly lowered the deposit facility rate from 0.1% to -0.1%, which sent the Japanese yen sharply lower against all the major peers.
The risk-off trading is benefiting the safe-haven assets, such as the yen or US Treasurys. Both these assets have been performing well since Monday.
"Since the beginning of the week the US dollar has been down 1.70% against the Japanese yen, while the demand for government bonds remains more than solid, pushing treasury yields to multi-month lows. The US yields curve had flattened significantly with the 10-year trading below the 1.90% threshold, while the 30-year hit 2.64% for the first time since August 2015," Arnaud Masset, market strategist at Swissquote Bank said in a note on Wednesday.
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2 Main Channels For JPY Weakness: How To Play It? - BNPP BNP Paribas views the main channels of JPY weakness to be:
1. Positioning – market is holding extreme long JPY positions. "Our BNP Paribas FX Positioning Analysis suggests that the FX market was not positioned for easing by the BoJ last Friday (29 January). Rather, the market appears to have built long JPY positions over January in response to the high level of risk aversion. On a scale of -50 to +50, the JPY’s positioning score stood at +36 ahead of the BoJ meeting, the largest net long position since 2011," BNPP argues.
2. Impact of negative rates in a multi-tier framework. "We expect the negative IOER rate to lead to a weakening of the JPY as the resultant decline in bond yields maintains Japanese investor portfolio outflows (a driver of JPY weakness in recent years). We expect this impact despite the multitier framework which means that this rate is not applied to all excess reserves, as it is the marginal interest rate that is the most important," BNPP adds.
In our view, two factors are holding the pair back. "First, USDJPY remains closely correlated with Japanese equities’ performance and renewed weakness in Japanese equities has kept the pair under pressure. Second, USDJPY tends to move in line with US yields and has therefore been affected by a fall in the market’s expectation of US rate hikes (over the past 12 months, USDJPY’s highest correlation has been with US 10y yields)," BNPP argues.
"As a result, we view FX options as an attractive way to position for a rise in USDJPY while reducing the downside risk from the impact of equity market sentiment and Fed rate-hike expectations," BNPP advsies.
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USD/JPY forecast for the week of February 8, 2016 The USD/JPY pair had a very negative week, slicing well below the 117 handle. The market is currently testing pre-significant support though, so the question then becomes whether or not we can actually continue the downward pressure in this type of environment. It’s likely that we will get quite a bit of volatility, so quite frankly it’s not until we get below the 160 level that we feel it’s easier to sell this market on a longer-term chart. Shorter-term traders will be attracted to this type of volatility though.
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Japan - Dec. Labor Cash earnings: +0.1% y/y (expected 0.7%) Japanese December Labor Cash earnings % y/y
Real cash earnings -0.1%