Japanese yen softens and breaks over 160.00.
The Japanese Yen (JPY) fell again on Wednesday, continuing a nearly 10-day losing streak. That included only one wobble on the way up. Traders are dipping their toes in the water to see if the Japanese Ministry of Finance will intervene in FX markets. Meanwhile, the Bank of Japan is still unsure when, how, or if it would reduce its debt-buying program.
The US Dollar Index surges following aggressive Fed comments.
Meanwhile, the DXY US Dollar Index, which measures the value of the US dollar (USD) against a basket of The Japanese Yen’s weakening has helped six foreign currencies become stronger. The Euro, the basket’s other heavyweight, isn’t helping either. As anxiety rises ahead of Sunday’s French snap elections and German consumer confidence falls further. This gives the DXY a boost from outside support. Despite the fact that recent economic data suggests the Greenback is overpriced.
Daily Market movers: Testing the BoJ. Japanese yen fall below 120.00.
Gareth Berry, Macquarie’s FX and Rates strategist, expects the USDJPY pair to fall below 120.00. According to Bloomberg. This downward compression is projected to occur within the next 18 months.
Furthermore Takafumi Onodera, Head of Sales and Trading Business at Mitsubishi UFJ Trust and Banking Corporation, stated that the Japanese authorities will not intervene Until Friday’s US Personal Consumption Expenditures (PCE) report. A stronger-than-expected report might increase volatility and send the Yen soaring toward 163.00 against the US Dollar. Prompting regulators to conduct a “rate check” or intervene during a moment of low liquidity. Rate checks tell traders that authorities may be poised to intervene to strengthen the yen.
Mortgage Application numbers for the week ending June 21 will be released at 11:00 GMT.
The weekly Mortgage Application numbers for the week ending June 21 will be released by the Mortgage Bankers Association (MBA) at 11:00 GMT. Mortgage applications increased by 0.9% the prior week.
Moreover The new home sales figures for May will be released at 14:00 GMT. Analysts predict sales to rise marginally to 640,000 from 634,000 in April.
At 17:00 GMT, the US Treasury will release a 5-year note to the market.
Federal Reserve’s Bank Stress Test report will be released at 20:30 GMT.
The Federal Reserve’s Bank Stress Test report will be released at 20:30 GMT.
Equities are recovering after Nvidia (NVDA) managed to post gains at the US closing bell on Tuesday. The big Asian indices are all in the green. And even the Dax and the pan-European Euro Stoxx 50 are improving. US futures are uneven, with Dow Jones Industrial futures in the red, Nasdaq futures in the green, and the S&P 500 in the middle.
Despite recent comments by Fed officials, the CME Fedwatch Tool is widely supportive of a rate cut in September. The current odds for a 25-basis-point decrease are 57.9%. The probability of a rate pause is 35.9%, while a 50-basis-point rate drop is unlikely 6.2% chance.
The Overnight indexed Swap curve for Japan indicates a 56.6% possibility of a rate hike on July 31, with a smaller 49.6% chance on September 20.
The 10-year benchmark rate in the United States is trading near the weekly high of 4.27%.
The benchmark 10-year Japan Treasury Note (JGB) is trading at approximately 1.023%. Breaching above 1% for the first time since June.
