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  • Writer's pictureMike Paterson

Yen supply returns

Thursday 8 February 2024

More two-way business but dovish tones from BoJ's Dep Gov Uchida made a case for slow tightening and we've seen some JPY supply and USDJPY once again testing 148.80 with the key 149.00 in sight as USD analysts and traders continue to second-guess. US Fed speakers yesterday re-iterated last week's tones of being patient with interest rate cuts. DJI and S&P equity markets closed at record highs and the latter testing the significant 5000 level.

The Ukraine/Russia war and Middle East Israel/Hamas/Houthi/Hezbollah/Red Sea tensions are all still casting their own shadow. Data focus today is on the weekly US jobs numbers and CB speakers feature Fed's Barkin again and BOE's Mann.

Equities remain underpinned as European trading gets underway. WTI has capped at $74.30 in Asia with sellers poised still after holding $73.30-50 yesterday with Red Sea concerns, and technicals offering some support still. Gold rallied again to test $2045 but holding $2030 in the retreat so far as we continue to range tightly.

GBPUSD: Capping above 1.2640 after holding 1.2600 yesterday as the USD jury remains out but support coming from GBPJPY demand.  I remain poised for further sells when momentum fades as we continue to range. EURGBP: Capping at 0.8540 after holding 0.8515 in yesterday's retreat amid the GBP demand but the BOE/ECB debates continue. GBPJPY: Holding 186.50-50 yesterday and now testing 187.90-00 in the wake of the Uchida comments.Sellers will remain poised but underpinned again for the moment.

EURUSD: Support at 1.0750-60 yet again yesterday but capping at 1.0790 this morning with general EUR supply and USD demand notable still. I remain a rally seller. USDJPY: Capping around 148.80 yet again as I type with 149.00 still providing key resistance. I remain a rally seller as preferred side overall but dip demand still notable for the moment.

For more detailed analysis across a larger number of FX pairs including market order flows and options expiries email

Interbank rates: 07.54 GMT

GBPUSD    1.2625

EURUSD    1.0778

EURGBP    0.8536

GBPEUR    1.1714

USDJPY    148.73

GBPJPY    187.79

GBPCAD    1.6973

GBPCHF    1.1018

GBPZAR    23.9162

GBPHKD    9.8231

USDCHF    0.8733

EURCHF    0.9412

EURHKD    8.3815

AUDUSD    0.6521

NZDUSD    0.6110

USDCAD    1.3456

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