JPY demand returns after Ueda comments
- Mike Paterson
- Sep 11, 2023
- 2 min read
Monday 11 September 2023
9/11 - We must never forget.
We saw a gap lower in JPY pairs on the Asia opening after commnents by Bank of Japan Governor Ueda over the weekend suggested they might cut back on their monetary stimulus by end of 2023 if wages continue to rise. JPY demand generally prevailing with USDJPY down testing 146.00 as I type. Japanese 10 year bond yields rising to levels not seen since 2014.
Pressure still on the Chinese Yuan giving cause for concern still but US bond yields still providing some support for the Greenback overall albeit off its highs again this morning with the JPY cross demand helping to cap core pairs too. UK jobs/wages data and German ZEW in focus for tomorrow.
Equities are rallying off Friday's lows while the jury remains out and WTI capped around $87.40 this time but holding $86.20 in the retreat. Gold finding support around $1915 again and rally extending above $1930 this time before capping as the jury remains out and tight ranges prevail. Geopolitical concerns still very much a threat to market stability with focus on increasing Ukraine/Russia tension but also the Middle East among other areas of conflict.
GBPUSD: 1.2440-50 providing the base again on Friday but capping into 1.2530 this morning as GBP supply comes from some GBPJPY selling again. I remain bearish on the UK and GBP overall. Poised for re-sells.
EURGBP: Breaking down through 0.8570-75 this morning in the retreat from 0.8600. More two-way expected overall as core pairs make their mind up but should stay underpinned on CB expectations. GBPJPY: Capped at 184.50 on Friday then gapping lower in Asia on the Ueda comments and a decent retreat to test 183.20 before a small bounce to 182.90 so far. Sellers ever poised as risk remains fragile as I've been warning.
EURUSD: A hold of 1.0690-00 on Friday but capping now at 1.0740. I remain a rally seller. USDJPY: Gapping down to `146.75 from 147.75 on the Ueda comments and then a further drop through 146.50-60 to test 146.00 this morning. I remain a rally seller as preferred side overall with patience a virtue as ever. Ueda's comments proving that sharper risk is to the downside as I've been saying for a while.
More detailed analysis across a variety of pairs and 1-2-1 mentoring sessions for traders from mike@mspfx.co.uk
Interbank rates: 08.03 BST
GBPUSD 1.2517
EURUSD 1.0731
EURGBP 0.8572
GBPEUR 1.1663
USDJPY 146.02
GBPJPY 182.78
GBPCAD 1.7027
GBPCHF 1.1160
GBPZAR 23.6878
GBPHKD 9.7531
USDCHF 0.8900
EURCHF 0.9553
EURHKD 8.3574
AUDUSD 0.6439
NZDUSD 0.5926
USDCAD 1.3595

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