Tag Archive: Japan

Market Awaits US Data and Leadership

2023-08-30

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2023-08-30

Overview:  The dollar staged a major technical reversal yesterday, in a dramatic reaction to a considerably weaker JOLTs report than expected, spurring a large drop in US interest rates. And this is despite press reports that the participation rate in the survey is half of what was three years ago. We suspect the price action said as much about market positioning as it did about the data. The path to the US jobs data on Friday goes through...

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Still No Follow-Through Dollar Buying After Last Week’s Surge

2023-08-29

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2023-08-29

Overview: The dollar was threatening to break higher at the end of last week, and the euro and sterling closed below key supports. However, so far this week, the greenback is consolidating and has not seen follow-through buying. The key data this week, US consumption and jobs, and the eurozone's CPI still lay ahead. The Antipodeans and Norwegian krone enjoy a firmer today. A 0.8% contraction in Sweden's Q2 GDP was not as deep as had been feared,...

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Dollar Consolidates as Market Considers Breakout and Rebuffs Beijing’s Latest Efforts

2023-08-28

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2023-08-28

Overview: Many market participants sense an inflection point is near. The dollar settled last week beyond key levels against several major currencies, bolstered by higher short-term US rates. The market is aware that the Bank of Japan could intervene in the foreign exchange market with the trading near its best levels of the year, and the 10-year JGB yield grinding higher. Beijing cut the tax on equity transactions, will restrict IPOs, and urged...

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Dollar Bid and Rates Firm Ahead of Powell

2023-08-25

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2023-08-25

Overview: The euro and sterling took out important chart levels near $1.08 and $1.26, respectively. They have steadied in the European morning but remain fragile ahead of Fed Chair Powell's speech at Jackson Hole. A couple of ECB officials sounded a bit hawkish and a less hawkish comment by ECB President Lagarde could renew the pressure on the euro. The market appears to be going into Powell's speech with a hawkish bias and the odds of a hike next...

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BRICS to Expand a Little, USD Steadies after Yesterday’s Retreat, Attention Turns to Jackson Hole

2023-08-24

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2023-08-24

Overview: Strong Nvidia's earnings after the US markets closed yesterday helped lift Asia Pacific markets today. All the large bourses were higher but India. Hong Kong, South Korea, and Taiwan indices rose more than 1%. Europe's Stoxx 600 is higher for the fourth consecutive session and US index futures are higher, led by the NASDAQ. European benchmark bond yields have extended yesterday's PMI-induced decline and are mostly 1-2 bp lower. The...

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Dollar Eases, Stocks and Bonds Advance

2023-08-22

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2023-08-22

Overview: For the first time in more than a week, North American dealers will take to their posts with the dollar softer against all the G10 and most of the emerging market currencies. Despite stepped up efforts by Chinese officials and a firmer yen, the yuan remains on the defensive and is one of the handful of emerging market currencies softer on the day. Stocks and bonds are mostly higher too. The yuan might not be benefitting from a softer...

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Dollar Bulls Still in Control

2023-08-18

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2023-08-18

Overview: What may have been hoped to be a quiet August has turned into a feeding frenzy for dollar bulls as the contrasting economic performance has spurred persistent buying of the greenback. Even shallow dips have been bought. Today, it is mostly trading inside yesterday's ranges against the G10 currencies. The PBOC set the dollar's reference rate at what appears to be a record gap below the Bloomberg average survey, and the dollar was scooped...

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Aussie Recovers from Poor Jobs Data, but Nokkie is Weaker Despite Rate Hike

2023-08-17

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2023-08-17

Overview: Encouraged by the continued stream of US data, which suggests that the world's largest economy is accelerating, the US 10-year yield is approaching last year's 4.33% high, and the dollar's run has lifted it to new highs for the year against the Japanese yen, Chinese yuan, and the Australian and New Zealand dollars. Even a rate hike by Norway did not stop the dollar from rising against the krone. The greenback is firmer against most of the...

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Dollar’s Rally Pauses Near Key Levels

2023-08-16

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2023-08-16

Overview: The US dollar is trading with a slightly heavier tone in the European morning. It has stalled in front of JPY145.90, where the BOJ intervened last September and ahead of CNY7.30, which some observers think Chinese officials are defending. We are less convinced that either central bank has drawn a line at a particular level and suspect it is too early to be confident that the greenback has peaked against either. On the back of yesterday's...

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Surprise-Packed Tuesday: China Cut Rates, Japan’s Q2 GDP Rises Twice as Fast as Expected, and UK Wages Accelerate

2023-08-15

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2023-08-15

Overview: Today's highlights include a surprise rate cut from China after another series of disappointing data and much stronger than expected Japanese Q2 GDP (6% annualized pace). The UK reported an unexpected sharp jump in average weekly earnings, which were sufficient to get renew speculation of a 50 bp hike by the Bank of England next month. The US dollar is mixed. The Swedish krona and dollar-bloc currencies are struggling, while the Swiss...

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Dollar Proves Resilient and Even Strong UK GDP Figures Hardly Dents It

2023-08-11

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2023-08-11

Overview: The dollar's resilience after initially selling off in response to the as-expected CPI was impressive. A quieter tone is dominating today and most of the G10 currencies are +/- 0.15%. While the dollar is consolidating, the underlying tone is still firm. For the week, it has risen against all the major currencies and the Dollar Index is up nearly 0.6% this week, its fourth consecutive weekly gain. The greenback is rising today against most...

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Risk Appetites Squashed by Weak Chinese Imports/Exports and Moody’s Downgrade of 10 US Banks

2023-08-08

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2023-08-08

Overview: The combination of falling Chinese imports and exports, Moody's downgrade of ten US small and medium-sized banks is serving to squash risk appetites. Equities are weak, but bond markets are strong despite the surprise tax on Italian banks announced yesterday and the kick-off of the US $103 bln refunding today. Outside of Japan and Australia, Asia Pacific equity markets were lower led by a 1.8% drop in the Hang Seng and a nearly 2.2% loss...

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US Jobs Report and OPEC Statement Featured Ahead of the Weekend

2023-08-04

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2023-08-04

Overview: The capital markets are calmer today but the US (and Canadian) jobs data stand in the way of the weekend. While equity markets are firmer, the rise in yields continues with new highs for the week being recorded today. European benchmark yields are 2-3 bp higher and the US 10-year Treasury yield is approaching 4.20%. Most of the large market in the Asia Pacific region advanced, but South Korea and Taiwan where the superconductor...

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Markets Remain Unsettled, Bonds and Stocks Retreat, Dollar Gains Ahead of BOE

2023-08-03

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2023-08-03

Overview: The global capital markets remain unsettled. The combination of the BOJ adjustment of its monetary policy, Fitch's downgrade of the US to AA+, ahead of a flood of supply, and new measures by China have injected volatility into the summer markets. The US dollar has extended it gains today against the G10 currencies and most emerging market currencies. The yen has recovered a bit after the BOJ stepped in and bought JGBs for the second time...

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RBA Holds Fire, Greenback Rebounds

2023-08-01

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2023-08-01

Overview: The dollar has come back bid. It is rising against all the major currencies today. The Reserve Bank of Australia left rates steady and the poor Chinese Caixin PMI is weighing on the Australian dollar, which is off about 1.25% today. Sterling is the best G10 performer, off about 0.1%. Perhaps, the BOE's meeting on Thursday is helping to deflect some of the selling pressure. Emerging market currencies are also nearly all lower, led by the...

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BOJ Moves to Slow JGB Sell-Off, while Month-End is Making for Subdued Price Action in FX outside the Yen

2023-07-31

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2023-07-31

Overview:  The Bank of Japan took the market by surprise with its adjustment of the cap on the 10-year yield before the weekend, and then stepped in to buy the government bond as yields rose in reaction today. The move helped lift the dollar to JPY142.50. from where it had settled on Friday (~JPY141.15). The dollar is mostly softer, however, with only the yen and Swiss franc weaker. The Australian dollar is leading the other currencies higher ahead...

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Bond Rally Continues, Greenback Consolidates with Softer Bias

2023-07-18

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2023-07-18

Overview: The main development in the capital markets is the decline in yields. In Europe, benchmark 10-year yields are off 7-11 bp today, extending the move that began last week. The 10-year Germany Bund yield peaked last Thursday near 2.68% and is near 2.40% now. Similarly, the 10-year Italian yield has fallen from 4.42% to below 4.05% today. The 10-year US Treasury yield fell in five of the last six sessions and is off almost five basis points...

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After Dramatic Week, Capital Markets are Stabilizing

2023-07-14

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2023-07-14

Overview: After tumbling headlong this week, the dollar appears to be broadly consolidating ahead of the weekend Among the G10 currencies, the Canadian dollar's 1.2% gain is the least and it made new 10-month highs earlier today The beleaguered Scandis soared The Norwegian krone's 6.6% advance followed by the Swedish krona's 5.8% surge led the major currencies The Dollar Index is off about 2.4% this week ahead of the North American session It is...

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Dollar Sell-Off is Getting Stretched

2023-07-13

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2023-07-13

Overview: Softer-than-expected US CPI, following weaker than expected job growth has sent the greenback tumbling. The dollar is stabilizing against the yen today, but the downside momentum is intact against the other major currencies. The euro approached $1.1175, sterling $1.3080, and the greenback slumped to almost CHF0.8615. The Australian dollar reached $0.6850, and the New Zealand dollar tested $0.6360. The Canadian dollar, often a laggard in a...

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US CPI and Bank of Canada Highlight North American Session

2023-07-12

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2023-07-12

Overview: The US dollar's losses have been extended ahead of the June CPI. At the same time, speculation that the Bank of Japan will adjust policy later this month saw the yen extend its gains for the fifth consecutive session. Sterling made new highs since last April, while the Swiss franc has risen to its best levels in about 2 1/2 years. The Dollar Index gapped lower and through the trendline drawn off the April and May lows. The greenback has...

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