| DAILY YEN STEADY EURO WEAKER IN QUIET TRADE BY DAILY FX |
| YEN STEADY EURO WEAKER IN QUIET TRADE |
Talking Points
• AUD Trade Balance continues to shrink
• JPY Eco Watchers above 50 BOJ keeps rates steady
• EZ Trade Surplus wider
• CAD employment on tap
USD/JPY continued to demonstrate strength against both euro and pound in relatively quiet trade in Asia and early Europe as traders positioned ahead of the G-7 meeting this week-end. As expected the BOJ left rate unchanged at 25bp and at his post announcement press conference Governor Fukui offered little new information stating simply that “"We will adjust interest rate levels slowly while keeping a close eye on economic and price moves ahead.” This gradualist approach is consistent with BOJ statements in the past, although the fact that Governor Fukui did not completely rule out the possibility of more rate hikes before the year end suggests that Japanese monetary authorities remain flexible to the idea of further tightening especially as pressure from Europeans mounts.
EUR/JPY slipped to a fresh three week low today at 147.55 well off the 150.00 level it traded at just a few day ago as jawboning by Euro-zone policy makers clearly had an impact in the market. The key question going forward however is - will this move hold? If G-7 meeting fails to produce any definitive language on the need for global rebalancing, the market, having corrected the recent rally in the cross, may well revert to the tried and true carry trade theme, as EZ monetary authorities will almost assuredly proceed with further rate increases at their next meeting while their Japanese counterparts continue to remain stationary.
One positive piece of news for yen bulls was the release of the Eco-Watchers survey which rose above the 50 boom/bust level once again. With oil prices significantly lower, the Japanese consumer, buoyed by healthy corporate demand which has driven employment gains to decade long highs may be finally ready to begin spending. As BOJ sees additional evidence of stronger consumer behavior, the monetary authorities will become much more comfortable with further rate increases. Therein lies the best hopes for a yen rally as we move into the fall season.
Http://www.dailyfx.com
Email: bschlossberg@fxcm.com
Disclaimer:
Investment in the currency exchange is highly speculative and should only be done with risk capital. Prices rise and fall and past performance is no assurance of future performance. This website is an information site only. Accordingly we make no warranties or guarantees in respect of the content. The publications herein do not take into account the investment objectives, financial situation or particular needs of any particular person. Investors should obtain individual financial advice based on their own particular circumstances before making an investment decision on the basis of the recommendations in this website. While we try to ensure that all of the information provided on this website is kept up-to-date and accurate we accept no responsibility for any use made of the information provided. All intellectual property rights are the property of Daily FX. Daily FX and its affiliates, will not be held responsible for the reliability or accuracy of the information available on this site. The content herein is provided in good faith and believed to be accurate, however, there are no explicit or implicit warranties of accuracy or timeliness made by Daily FX or its affiliates. The reader agrees not to hold Daily FX or any of its affiliates liable for decisions that are based on information from this website. Daily FX highly recommends that before making a decision, the reader collects several opinions related to the decision and verifies facts from at least several independent sources.
Fx-charts.com Disclaimer: The information contained on this website is subject to change without notice, views and opinions expressed on fx-charts.com may be those of individual authors and may not necessarily be the views of fx-charts.com or its officers and employees, we make no claim to the accuracy or timeliness of any information contained herein. We recommend obtaining advice from a suitably qualified financial advisor before entering into any financial transactions or agreements. The use of this website constitutes acceptance of our privacy policy, disclaimer and terms of use. This website is available for information and educational purposes only.
|
