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Japan's Abe says top priority is to completely exit deflation and grow the economy
Japanese PM speaking in Tokyo 21 June 2016
USD/JPY: Yen Loses as Investors Confident About Bremain
Chances for Brexit are continuously dropping, as the polls conducted just a day before the referendum showed 'Remain' in the lead, reassuring investors and supporting the risk-on sentiment on financial markets.
The pair traded 1.19% higher at ¥105.65 on Thursday before the US trading session, still losing more than 15% since the start of the year.
Yen's losses on Thursday were caused by a reduced need for safe-haven assets as Brexit became an even less probable option.
The Ipsos MORI poll showed 52% support for the remain side, while 48% supported exit from the European Union.
Betting agencies lengthened their odds on Brexit after the poll, and indicated an 80% probability that the UK will remain in the EU, up from the previously seen 73%, while the chance for Brexit was just 20%.
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More comments from Japan - Aso, Nakaso
USD/JPY: Pair Breaks Through ¥103 Handle For First Time Since Brexit Vote
The USD/JPY traded as high as 103.03 on Thursday morning in Tokyo, the strongest since Friday when markets were shocked to find the UK had voted to leave the European Union (EU).
Last week the currency pair plummeted almost 5% in a matter of hours when it became clear which way the EU referendum vote was swinging.
Britons votes 51.8% versus 48.2% to cut ties with the EU in last week's referendum, an outcome which shocked investors and sent markets into tailspin.
Huge day coming up in Japanese trading
Japanese economic calendar is flush
There will be 20 minutes of economic data madness from Japan today from 2330 GMT to 2350 GMT. It starts with the employment report and then jumps to CPI and the all-important Q2 Tankan.
USD/JPY forecast for the week of July 4, 2016
The USD/JPY pair had a very tight week over the last 5 sessions, as we have essentially done nothing. There are a lot of different reasons for this, not the least of which is the fact that the Bank of Japan is more than likely going to be sitting just underneath, waiting to punish people who buying the Japanese yen. We could see intervention if we break down below the 100 level for any real length of time, and therefore I believe that this is a market that cannot be sold.
The 50% Fibonacci retracement level has offered support as well as the 100 level, and this is mainly due to the fact that it is such a popular support level to be used. The fact that it is just above the 100 level certainly helps as well, and they should mention that the 50% Fibonacci retracement level is based upon the absolute lows during 2012, meaning that this is a long-term Fibonacci retracement.The 100 level has seen quite a bit of noise previously, so I believe that it makes sense that it is only a matter of time before the buyers get involved. The market has a significant amount of buying pressure underneath, and of course the Bank of Japan. In other words, I think that we can only go higher from here, the least not without some type of major shock. Even then, it’s likely that the Bank of Japan will step in and fight the entire market as they have done several times in the past. They don’t know whether or not we can get a longer-term move higher anytime soon, but I do know that you cannot sell this market. With that, I am hesitant but bullish over the longer term. I believe that with caution, you could start buying but you would have to do it in very small increments and gradually build up your position over time, as you could have quite a bit of back and forth action as well as stagnation.
USD/JPY forecast for the week of July 4, 2016
The USD/JPY pair had a very tight week over the last 5 sessions, as we have essentially done nothing. There are a lot of different reasons for this, not the least of which is the fact that the Bank of Japan is more than likely going to be sitting just underneath, waiting to punish people who buying the Japanese yen. We could see intervention if we break down below the 100 level for any real length of time, and therefore I believe that this is a market that cannot be sold.
The 50% Fibonacci retracement level has offered support as well as the 100 level, and this is mainly due to the fact that it is such a popular support level to be used. The fact that it is just above the 100 level certainly helps as well, and they should mention that the 50% Fibonacci retracement level is based upon the absolute lows during 2012, meaning that this is a long-term Fibonacci retracement.The 100 level has seen quite a bit of noise previously, so I believe that it makes sense that it is only a matter of time before the buyers get involved. The market has a significant amount of buying pressure underneath, and of course the Bank of Japan. In other words, I think that we can only go higher from here, the least not without some type of major shock. Even then, it’s likely that the Bank of Japan will step in and fight the entire market as they have done several times in the past. They don’t know whether or not we can get a longer-term move higher anytime soon, but I do know that you cannot sell this market. With that, I am hesitant but bullish over the longer term. I believe that with caution, you could start buying but you would have to do it in very small increments and gradually build up your position over time, as you could have quite a bit of back and forth action as well as stagnation.
USD/JPY: Pair Refuses to Rise as Stocks Slide
The USD/JPY pair trimmed some daily gains, but was trading slightly higher during the session on Monday, with the greenback hovering around ¥102.70.
"Last week's increase in the level of yen longs is evidence of continued risk aversion in the wake of the result of the UK's referendum on EU membership. Yen longs reached their highest level since early May. USD longs also pushed higher in reflection of safe haven demand. Positions climbed to their highest levels since mid-April. That said, they remain far lower than at the start of the year given more dovish expectations regarding Fed policy," analysts at Rabobank said according to their research and CFTC data.
US traders are celebrating Independence Day today, therefore US markets will be closed and liquidity is expected to be low.Japan Shares Plummet as Yen Gains on Safe-Haven Demand
The Japanese yen fell below 101.00 against the US dollar on Wednesday for the first time since June 24, when Britain decided to leave the European Union (EU), helping to pummel local shares into the ground on Wednesday.
The USD/JPY traded 0.80% lower at 100.90 on Wednesday morning in Tokyo, off Tuesday's close in New York of 101.70, and the strongest the yen has traded since the UK referendum.
Moods were dampened on Tuesday when the Bank of England set out the economic and finacial implications of the UK's vote to leave the EU.
"We obviously welcome a return to relatively stable financial markets. But we do not think everything’s just fine. The actual negative economic impact will simply take longer to show," Rabobank analysts said in a note. "Moreover, some of it is plastered over by extraordinary monetary policy on which key central banks are likely to double down."
The BoE signaled last week that it intends to cut interest rates later this year to help ease the sting from the Brexit, while other central banks also look like they are gearing up to add more stimulus, including the Reserve Bank of Australia, the European Central Bank, and the Bank of Japan.
Overnight losses on Wall Street and a steep decline in oil futures added to the risk-off mood plauging Asian markets on Wednesday.
Local shares reacted accordingly to the yen's burst of strength on Wednesday, with the Nikkei 225 index plunging 2.36% to 15,298.99 points, while the broader Topix gauge fell 2.35% to 1,227.05 points.
Car manufacturers were among the most affected by the yen's strength, as Mazda Motor plummeted 6.6%, Honda Motor crashed 5.2%, Suzuki Motor fell 4.6%, and Nissan Motor dropped 3.4%.
Japanese real estate stocks also copped it on Wednesday. Tokyu Fudosan tumbled 5.7%, Sumitomo Realty & Development shed 5.4%, Mitsui Fudosan fell 4.4%, and Mitsubishi Estate lost 3.3%.
Telecoms were among only a handful of shares to gain in Tokyo on Wednesday morning though, with Nippon Telegraph & Telephone rallying 1.2%, and NTT Docomo adding 0.6%.
Chinese markets also opened on a sour note, with Hong Kong's benchmark Hang Seng index sliding 1.61% to 20,417.18 points and the Shanghai Composite easing 0.43% to 2,993.53 points.
South Korea's Kospi index fell 1.26% to 1,963.86 points in morning trade.
USD/JPY: Pair Heads for ¥100 Amid Risk Aversion Trading
The USD/JPY pair continued to plunge on Wednesday and was dropping to the ¥100 level during the EU session, losing around 1.36% on the day. The main risk-off impetus came from collapsing sterling, which dropped below the $1.30 mark and posted a new three-decade low.
Stocks were under pressure in Europe, with the broad EU50 index trading 2.30% lower, while US stock futures were also sliding. Meanwhile, gold soared over 1% to trade above $1,376 as demand for bullion increased amid market uncertainty.
Traders will focus on today's US data, which will most likely cause further volatility on the financial markets. Firstly, the services PMI for June is expected to stay at 51.3, but the non-manufacturing ISM is expected to improve to 53.3.
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