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.

0

Notifications

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

Live Webinar

Live Webinar Events

0

Economic Calendar

Economic Calendar Events

0
Free Trading Guides
Subscribe
Please try again
GBP/USD
Bearish
Low
High
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
  • Oil Watch "SPR could release 33 to 82.5mln barrels of crude oil in series of auctions, but it is unlikely to have a material impact on crude markets given China's 10mbpd import and 14mbpd consumption" - Wood Mackenzie
  • Take a closer look visually at the most influential global importers and exporters here: https://t.co/G58J1cYv9t https://t.co/7Q5Y3RquIj
  • Heads Up:🇯🇵 BoJ Gov Kuroda Speech due at 05:35 GMT (15min) https://www.dailyfx.com/economic-calendar#2021-09-27
  • 🇯🇵 Leading Economic Index Final (JUL) Actual: 104.1 Previous: 104.2 https://www.dailyfx.com/economic-calendar#2021-09-27
  • Crude Oil Prices Hit 2-Month High on Supply Squeeze, 2021 Top Eyed - https://www.dailyfx.com/forex/fundamental/daily_briefing/daily_pieces/commodities/2021/09/27/Crude-Oil-Prices-Hit-2-Month-High-on-Supply-Squeeze-2021-Top-Eyed.html?CHID=9&QPID=917708&utm_source=Twitter&utm_medium=Spivak&utm_campaign=twr #OOTT #crudeoil https://t.co/Rx9kbVPlys
  • 🇯🇵 Leading Economic Index Final (JUL) Actual: 104.1 Previous: 104.6 https://www.dailyfx.com/economic-calendar#2021-09-27
  • 🇯🇵 Coincident Index Final (JUL) Actual: 94.4 Previous: 94.6 https://www.dailyfx.com/economic-calendar#2021-09-27
  • Heads Up:🇯🇵 Coincident Index Final (JUL) due at 05:00 GMT (15min) Previous: 94.6 https://www.dailyfx.com/economic-calendar#2021-09-27
  • Heads Up:🇯🇵 Leading Economic Index Final (JUL) due at 05:00 GMT (15min) Previous: 104.6 https://www.dailyfx.com/economic-calendar#2021-09-27
  • Trading bias allows traders to make informative decisions when dealing in the market. This relates to both novice and experienced traders alike. Start learning how you may be able to make more informed decisions here: https://t.co/rz7fqi8ZEe https://t.co/I4C6fBkYPe
Yen Sinks as BOJ Frets Strength But The Move May Be Overdone

Yen Sinks as BOJ Frets Strength But The Move May Be Overdone

David Cottle, Analyst

Talking Points:

  • The Bank of Japan worried about the effects of Yen strength on capex and consumption
  • Japanese trade data scored an export miss
  • The Yen sank on one or both, but the reaction seems a little strong

Find out just what makes the best traders stand out from the rest with DailyFX in-depth study of the Traits of Successful Traders

The Japanese Yen was hit Monday after data showing a much weaker trade surplus than expected and, probably more pointedly, some worrying about currency strength from the Bank of Japan.

The BoJ’s ‘Summary of Opinions’ from the previous monetary policy meeting on March 8 and 9 pointed to modest, balanced expansion in the Japanese economy – no argument there – but also to persistently weak wages and inflation which, while rising, remains some way below target.

The BoJ said that “there is no change in the judgement that it is necessary to continue pursuing powerful monetary easing with persistence so that highly accommodative financial conditions are maintained.”

All up this seems yet another rebuttal to the view of some in the market that Japan could see policy tighten before inflation gets to the 2% target level. The BoJ also said that inflation momentum is not strong enough for that target to be achieved anytime soon and, perhaps crucially, that if Yen appreciation and stock declines are prolonged then capital spending and consumption could be more restrained.

This overt worrying about the Yen’s strength may be what saw USD/JPY climb after the release. Be aware however that there is nothing especially new or surprising here and that the immediate market reaction could be a little overdone.

Yen Sinks as BOJ Frets Strength But The Move May Be Overdone

Released simultaneously, February’s trade surplus probably didn’t help Yen bulls’ cause. It came in at JPY34.0 billion (US$320 million). The markets had hoped for JPY89.1 billion, but may have got ahead of themselves given the all-too-likely trade distortions which often stem from the long Chinese Lunar New Year break.

Exports rose by a modest 1.8% on the year, while imports soared by 15.5%.

The Japanese Yen remains in the clear ascendant against the US Dollar on the USD/JPY daily chart, where the long downtrend from the highs of early January remains very much in place.

However, that downtrend has faced a hiatus since mid-February, with broad range trade seen since between 107.31 and 105.21. That range has just seen another failed upside test, and is admittedly looking less and less like a platform from which US Dollar bulls can stage a meaningful turnaround.

Yen Sinks as BOJ Frets Strength But The Move May Be Overdone

By the same token there is little to suggest that the range won’t also be respected to the downside, if tested so for the moment it’s probably still all traders have to play with.

Resources for Traders

Whether you’re new to trading or an old hand DailyFX has plenty of resources to help you.

Be sure to make the most of them all. They were written by our seasoned trading experts and they’re all free.

--- Written by David Cottle, DailyFX Research

Follow David on Twitter@DavidCottleFX or use the Comments section below to get in touch!

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

DISCLOSURES