Headlines:
Japanese yen jumps across the board on suspected interventionUSD/JPY with a sharp drop lower after crossing the 159.00 mark earlierJapan finance minister Katayama declines to say if they intervened in the FX marketBOJ governor Ueda says will place larger focus on inflation in making policy decisionsBOJ governor Ueda says will closely coordinate with government on the bond marketGermany January flash manufacturing PMI 48.7 vs 47.8 expectedFrance January flash services PMI 47.9 vs 50.5 expectedEurozone January flash services PMI 51.9 vs 52.6 expectedUK January flash services PMI 54.3 vs 51.7 expectedUK December retail sales +0.4% vs -0.1% m/m expected
Markets:
GBP and AUD lead, NZD lags on the dayEuropean equities slightly lower; S&P 500 futures down 0.1%US 10-year yields down 2.2 bps to 4.229%Gold down 0.2% to $4,924.53WTI crude oil up 1.6% to $60.34Bitcoin down 0.1% to $89,130
The Bank of Japan (BOJ) decision today went as
expected and so did Ueda’s press conference for the most part. The Japanese
central bank governor didn’t offer much on what the BOJ would do to help with
the yen currency plight and that triggered some selling pressure as we got into
early European trading.
USD/JPY moved up from 158.60 to 159.20 before
being sent for a quick trip lower to 157.33 in a span of just five minutes. 📉
It is suspected that Tokyo officials performed
a ‘rate check’ of sort, solidifying their intentions to intervene in the market
to defend the yen currency. It would seem that they do not want to let this go
to 160 before taking action.
The move isn’t as strong as you tie to any
actual intervention with USD/JPY quickly bouncing back to settle around
158.00-30 currently. Price action is still volatile but the dip lower widely
suggests that this was a ‘rate check’ at most.
In any case, prepare yourselves for actual
intervention to follow. That was the case back in July 2024 and then in
September 2022 as well. Ironically, the last time the MOF actually stepped in was also on a Friday (12 July 2024 at 2100 GMT). 👀
Besides that, the major currencies space didn’t
get up to much with the dollar still reeling from the continued selling this
week. EUR/USD is down slightly but continues to hold above 1.1700 with USD/CHF
sitting closer to 0.7900, keeping around the 2025 lows still.
Some positive UK data is helping the pound get
a minor lift with GBP/USD up 0.2% to 1.3520 while AUD/USD is also seen higher
by 0.2% to 0.6850 on the session.
In other markets, equities are keeping more
cautious in the final stretch of the week after the rebound in the past few sessions.
US futures are down while European indices are also holding slightly lower,
with overall optimism still limited by uncertainty on the geopolitical and
economic fronts.
I mean, who is to say what Trump will be up to
next week? 🤵🏼🇺🇸
As for commodities, gold is down 0.2% to $4,924
while silver is up 2.7% to $98.75 (briefly hit $90 for the first time ever) as precious metals continue to stay hot overall
ahead of the final week of January. 🔥
The former is continuing to eye the $5,000
level with the latter having its sights on $100, both being key psychological
levels to be mindful of. That especially with the January seasonal tailwind
also starting to meet its end next week.
This article was written by Justin Low at investinglive.com.