Tag Archive: Bank of Japan
May Day Fed Day
Overview: Much of Asia and Europe are off for the
May Day labor holiday. The dollar is mostly softer in the thin activity. However,
the dollar has edged higher against the yen and approached JPY158. The euro
initially fell to $1.0650, a six-day low and where a billion euros in options
expire later today. It has recovered to almost $1.0675. Emerging market
currencies are subdued. Central European currencies, the South African rand,
and Mexican peso...
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Gold, Oil, and Interest Rates Rise
Overview: The market put more weight on the rise in
the US ISM manufacturing survey than the downward revision to the manufacturing
PMI and the unexpected back-to-back decline in construction spending. US rates
shot up and lifted the greenback. The Dollar Index made a new high for the
year, a little above 105, which had been anticipated by the new lows recorded
by the Bannockburn
World Currency Index (a GDP-weighted basket of the currencies of...
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Waller Pushes on Open Door: Push for Patience Lifts the Dollar, Complicating Japanese Efforts
Overview: Comments by Fed Governor Waller, urging
patience on rates and wanting more evidence that price pressures are moderating
has helped the greenback extend its recent gains. The yen is the notable
exception as the fear of intervention has restrained the dollar bulls. Poor
German data, including a sharp 1.9% drop in February retail sales, the fourth
consecutive monthly decline, underscored the euro's negative divergence, and the
single...
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Dollar Extends Gains Against the Yen but Broadly Firmer Ahead of the FOMC
Overview: The US dollar remains bid ahead of the outcome of today's
FOMC meeting. No change in policy is expected, but the forward guidance, partly
delivered in the updated projections, is the focus. In the last iteration
(December), the Fed "dot" was for three rate cuts this year. Japanese
markets were closed for a national holiday today but dollar's gains against the
yen have been extended and the greenback is nearing the peak seen in...
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Greenback Surges after BOJ Hikes and Ends YCC and RBA Delivers a Dovish Hold
The US dollar is surging today against most of the G10 currencies, and although the intraday momentum is stretched ahead of start of the North American session, there may be little incentive to resist before the end of the FOMC meeting tomorrow.
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Heightened Speculation of a BOJ Move Tomorrow did not Stop the Nikkei from Rallying or Yen from Slipping
Overview: The US dollar is trading with a mostly
softer bias against the G10 currencies. The notable exceptions are the Japanese
yen and Swiss franc. Ironically, speculation of a Bank of Japan rate hike
appears to have increased, while there is a risk that the Swiss National Bank
cuts rates this week. The Norwegian krone is the strongest of the major
currencies. The central bank meets later this week but is widely expected to
stand pat. The...
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Consolidation Featured Ahead of Tomorrow’s US Retail Sales and Friday’s Japanese Wage News
Overview: We came into this week expecting the dollar to rise on the back of a recovery in rates. The two-year note has risen from 4.40% after the jobs report to 4.60%. The dollar's rise has
been less impressive.
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Ueda’s Comments Knock the Yen Back, while the Euro Flirts with $1.08
Overview: The US dollar is mixed today. The dollar-bloc currencies and the Scandis are enjoying a slightly firmer tone, while the euro and sterling are edging higher in European turnover.
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Yen Pops on BOJ Comments on Inflation, but the Dollar holds Most of Yesterday’s Gains against the other G10 Currencies
The dollar is mixed as the market awaits the US personal consumption expenditure deflator, which is the measure of inflation the Fed targets. While there is headline risk, we argue that the signal has already been generated by the CPI and PPI releases.
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Weak US Durable Goods may Herald Pullback in Capex
Most of the G10 currencies are trading quietly in narrow ranges today. After a slightly firmer than expected national CPI reading, which still moderated, and a pullback in US yields, the Japanese yen is the strongest of the major currencies.
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USD Looks Oversold on Intraday Basis Ahead of a Possible Risk-Off North American Session
Overview: The US dollar is trading lower against most
currencies, but the intraday momentum indicators are stretched, suggesting the
selling pressure may not be sustained through in North America today. December
US personal income and consumption data was contained in yesterday's Q4 23 GDP
data, but the market want to see the monthly print, which is expected to see
the core measure ease with the headline rate flat. Tokyo's January CPI was much...
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BOJ Stands Pat, Exit Draws Closer, while HK Liquidity is Squeezed Easing Pressure on the Yuan
Overview: The dollar remains largely confined
to its recent ranges as the consolidative phase extends. The Bank of Japan
stood pat and revised its forecasts as it is seen drawing closer another
adjustment in policy, with the market still favoring an April timeframe. A
squeeze in the Hong Kong money market and talk of a large package to support
the equity market helped lift the Chinese yuan for the third consecutive
session and lifted Chinese...
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Dollar Extends Losses Post-FOMC
Overview: We suspect that if Martians read the FOMC
statement, which was nearly identical to the September statement and listened
to Chair Powell, they would conclude there was nothing new. Yet, the market
habitually hears Powell as dovish and this has weighed on rates and the dollar,
while lifting risk appetites. Follow-through selling of the greenback has
dragged it lower against all the major currencies, with the Antipodean leading
the way, and...
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Japanese Fireworks Continue as the Market Turns to the FOMC
Overview: The FOMC meeting is today's highlight but
the drama in Japan continues to rivet the market. The Ministry of Finance
warned of the risk of material intervention in the foreign exchange market, and
the BOJ bought bonds in an unscheduled operation a day after its downgraded the
1.0% cap to a reference rate, whatever that means. The yen is trading with a
slightly firmer bias. The Swiss franc is also trading a little firmer, but the
other G10...
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BOJ and China PMI Disappoint, While EMU Q2 Growth and October Inflation were Softer than Expected
Overview: The Bank of Japan softened its 1.0% cap on
the 10-year, while lifting its core CPI forecast this fiscal year and next. This
disappointed many who anticipated a bolder move to exit the extraordinary
monetary policy. The yen was sold in disappointment and the dollar has returned
to the JPY150.75 area. The eurozone contracted by 0.1% in Q3, while October CPI came in below expectations at 2.9%. The greenback is softer against most of the...
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Geopolitical Tensions Lift Oil and Gold, but little Sign of Haven Buying in FX
Overview: US economic data surprised to the upside yesterday,
and although interest rates rose as one would expect, the dollar's initial
gains were pared, and the Dollar Index finished slightly lower on the day. This
seemed, in some respects, to echo how the greenback reacted to the recent jobs
report. However, then, interest rates softened, but the inability to rally on
seemingly good news is notable. The heightened tensions in the Middle East...
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Bonds Extend Recovery
Overview: Broadly speaking, the dollar's
recent pullback was extended today but the momentum appears to be slowing,
perhaps ahead of tomorrow's US CPI report. The Dollar Index slipped to its
lowest level since September 25 before steadying. The greenback is mixed as the
North American market is set to open. The dollar bloc and Swedish krona are the
underperformers. The Swiss franc is the best, up about 0.2%, while the yen and euro are little...
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Markets Continue to Struggle
Overview: The markets remain unsettled. Follow-through
dollar selling has been limited today after yesterday's pullback. Narrow ranges
are prevailing, but the Norwegian krone and Canadian dollar, the weakest G10
currencies in recent days, are heavier again today. Although it seems that the
BOJ did not intervene earlier this week, but the dollar bulls has been
chastened just the same and the greenback is holdings below yesterday's high...
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Strategic Ambiguity Leaves Intervention Question Unanswered, but US Dollar has Steadied
Overview: Dramatic yen price action around the JOLTS
report yesterday after the dollar pierced the JPY150 level spurred speculation
of BOJ intervention. Although there has been no confirmation, the strategic
ambiguity is helping steady the yen and the dollar more broadly today, even
though US yields remain firm. Final PMI readings were a better than the flash
estimates and this may also be facilitating the consolidative tone. Most
promising, from a...
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Dollar Stabilizes After Extending Gains
Overview: The dollar's gains were initially extended before a
consolidative tone emerged. The euro has been sold to $1.0460
and has returned to almost $1.05. Sterling fell to nearly $1.2060 and has
recovered though has stopped short of $1.2100. The dollar edged closed to
JPY150 but stalled near JPY149.95 and has held above JPY149.65. The Australian
dollar near $0.6300 and the greenback rose to CAD1.3725.
Benchmark 10-year yields are firm, though...
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