News & Analysis at your fingertips.

We use a range of cookies to give you the best possible browsing experience. By continuing to use this website, you agree to our use of cookies.
You can learn more about our cookie policy here, or by following the link at the bottom of any page on our site. See our updated Privacy Policy here.



Notifications below are based on filters which can be adjusted via Economic and Webinar Calendar pages.

Live Webinar

Live Webinar Events


Economic Calendar

Economic Calendar Events

Free Trading Guides
Please try again
Oil - US Crude
of clients are net long.
of clients are net short.
Long Short

Note: Low and High figures are for the trading day.

Data provided by
More View more
Real Time News
  • Robinhood given an enterprise value of $32 billion after shares priced at $38. Get your market update here:
  • 🇰🇷 Business Confidence (JUL) Actual: 97 Previous: 98
  • Forex Update: As of 20:00, these are your best and worst performers based on the London trading schedule: 🇳🇿NZD: 0.87% 🇨🇦CAD: 0.63% 🇨🇭CHF: 0.43% 🇯🇵JPY: 0.39% 🇪🇺EUR: 0.37% 🇦🇺AUD: 0.27% View the performance of all markets via
  • Robinhood closes its first session as a publicly listed company down just over 8% $HOOD
  • Heads Up:🇰🇷 Business Confidence (JUL) due at 21:00 GMT (15min) Previous: 98
  • Commodities Update: As of 20:00, these are your best and worst performers based on the London trading schedule: Silver: 2.33% Gold: 1.17% Oil - US Crude: -0.33% View the performance of all markets via
  • IG Client Sentiment Update: Our data shows the vast majority of traders in Silver are long at 92.22%, while traders in Wall Street are at opposite extremes with 75.65%. See the summary chart below and full details and charts on DailyFX:
  • Last week’s price action has produced a shooting star formation and yesterday’s FOMC announcement helped to extend the move, driving the USD lower as the Canadian Dollar bounces from its earlier-month lows.Get your market update from @JStanleyFX here:
  • Following Amazon's miss on Q2 revenues, Nasdaq 100 futures give back Thursday's gains $AMZN $NDX $NQ
  • I recently had the pleasure of speaking with @chigrl about women in finance, the FinTwit community and trends in the crude oil space Check out the full interview and article -
GBP/JPY May Fall as the Fed Feeds Yen Real Yield Advantage: Q3 Top Trading Opportunities

GBP/JPY May Fall as the Fed Feeds Yen Real Yield Advantage: Q3 Top Trading Opportunities

Ilya Spivak, Head Strategist, APAC


  • Japanese Yen supported as the Fed moves up rate hike timeline
  • Bets on structural disinflation give Japan a real yield advantage
  • Pound may suffer outsized losses vs. JPY, topping pattern eyed

The Japanese Yen rose in the wake of June’s momentous FOMC meeting, where policymakers said that price growth had surpassed their expectations and shifted up the timeline for on-coming interest rate hikes. Having previously seen rates flat through 2023, the central bank has now penciled in two hikes that year.

The priced-in market view implied in Fed Funds futures following the announcement is more aggressive still, envisioning one hike in 2022 and two more in the following year. That probably echoes subsequently hawkish comments from officials including the presidents of the St Louis, Boston and Dallas Fed branches.

Japanese yields rose in tandem with those in the US in response, reflecting the ubiquity of the US Dollar as the go-to medium of exchange global trade. Close to 80% of global monetary transactions are settled in USD. So, a rise in the cost of borrowing the Greenback typically translates into higher credit costs globally.

As it happens, the process that the Fed is slowly initiating finds most global policy rates having converged on Japan – that is, toward zero and sometimes beyond it, into negative territory – amid the onset of the Covid-19 pandemic. Recovering from these depths in most places is expected to come alongside reflation.

Japan is a familiar exception. Here, structural forces holding down prices for the better part of 30 years and inspiring an epic (and mostly fruitless) BOJ counteroffensive remain in play. What this means is that real interest rates – that is, nominal yields discounted by the expected rate of inflation – are higher in Japan than most of the G10.

5-year breakeven inflation chart

Since most nominal rates have converged near zero, the size of the inflation haircut has become pivotal. That is inherently small in Japan relative to global counterparts, so the inflation-adjusted yield to be had on JPY-denominated holdings emerged as more attractive.

The BOJ policy of capping 10-year yields at 0% is an obvious headwind here, but it seems fragile. The central bank already owns almost half of Japan’s bond issuance to sustain it. Scope to do more seems limited, lest the monetary authority and the government itself be accused of outright debt monetization, an international taboo.

Of the major currencies, the Yen’s most pronounced advantage in this sense seems to be against the British Pound. As inflation fears push the Fed moves to pressure nominal rates upward globally, Japan’s real-yield advantage seems likely to expand further.


On the technical front, GBP/JPY may be forming a double top at resistance near the January 2018 high. Prices broke seven-month trend line support and negative RSI divergence warns of ebbing upside momentum. Pushing past support at 151.32 may expose the 148-149 zone. A further break below that might also pierce the uptrend from March 2020.


GBP/JPY weekly chart created withTradingView

See the favorite trades setups from each DailyFX analyst for the third quarter. Download our new 3Q Top Trading Opportunities guide!

DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.