EUR/USD 1.17255
0.041%
Gold 4712.50
-0.585%
Oil 94.222
3.220%
USD/JPY 159.318
0.008%
GBP/USD 1.35361
0.021%
GBP/JPY 215.659
-0.035%
Browse More
  • English
  • 简体中文
  • 繁體中文
  • Tiếng Việt
  • ไทย
  • Indonesia
Subscribe
Real-time News
On April 27th, Barclays analysts stated in a report that with inflation remaining high, the Federal Reserve is expected to keep the target range for the federal funds rate unchanged at its meeting this week, but a rate cut is still possible this year. The analysts said, "In a highly uncertain environment, the Fed tends to remain on hold. Strong demand and still relatively high inflation support its patience, and policymakers have also signaled a diminishing confidence in further rate cuts in the near term." The analysts indicated that if inflation falls as expected, the Fed is expected to gain sufficient confidence to begin easing policy around September. "We still expect it to cut rates this year." According to LSEG data, the money market currently prices in a 10 basis point rate cut by the Fed in 2026.The Philippine Department of Energy announced that the United States has approved an extension of the exemption period for the Philippines to purchase Russian oil and petroleum products.Toyota Motor Corp. reported a sales decline in March as demand for its best-selling RAV4 model weakened ahead of a facelift, while the conflict in Iran threatened to cut off key supplies, forcing the manufacturer to potentially reduce production. The company said Monday that global sales (including those of its subsidiaries Daihatsu and Hino) fell 5.8% year-on-year to 983,126 vehicles in March, while global production rose 3.9% to 1.02 million vehicles. These figures suggest that the worlds largest automaker is managing to stay afloat despite rising prices for raw materials such as aluminum and the base cost of auto parts due to the turmoil in the Middle East. Suppliers are preparing for shortages that could last for months, even if the Strait of Hormuz reopens and shipping returns to normal. Refineries need time to resume operations, and shipping companies need to digest the congestion caused by hundreds of ships stranded in the Persian Gulf. Major supplier Denso Corp. said in March that the ongoing conflict had reduced Japans monthly auto production by approximately 20,000 vehicles.Japans leading economic indicators for February came in at 1.3% month-on-month, compared with 0.3% previously.Japans leading indicator final reading for February was 113.3, compared to 112.4 in the previous month.

USD/JPY Reverses Two-Day Advance Despite Positive Rates and Bullish Fed Statements

Alina Haynes

Feb 15, 2023 14:36

 USD:JPY.png

 

Following a two-day winning run, USD/JPY returns to the bears' radar early on Wednesday as market players evaluate the Fed's hawkish decision in relation to their expectations for the Bank of Japan's (BoJ) next move. As a result, the Yen pair re-establishes its intraday low near 132.70 and has posted its first daily loss in three days, down 0.20% as of press time.

 

The Japanese government's choice of a hawkish leader for the Bank of Japan (BoJ) board appears to have pressured USD/JPY negative in recent days, despite the rise in US Treasury bond yields and the US Dollar's rebound following US inflation data.

 

The Japanese government nominated Kazuo Ueda as Governor of the Bank of Japan on Tuesday. Notably, Bloomberg published an article saying that the Bank of Japan's easy-money policy could be challenged as a result of Ueda's hawkish predisposition.

 

Even if inflation did not exceed "positive surprise" expectations, the majority of Federal Reserve (Fed) policymakers outside of the United States supported additional rate hikes. The yields on US Treasury bonds and the US Dollar were driven by the same factor.

 

The US Consumer Price Index (CPI) increased by 6.4% year-over-year, exceeding market estimates, but registering the slowest increase since 2021 and falling below 6.5% previously. Importantly, the CPI excluding food and energy, often known as the Core CPI, rose by 5.6% compared to market forecasts of 5.5% and prior readings of 5.5%.

 

Following the release of the numbers, the president of the Dallas Fed, Lorie Logan, indicated that they must be prepared to continue rate hikes for a longer period than previously planned. John Williams, president of the New York Federal Reserve Bank, reiterated this attitude, noting that the task of containing high inflation is not yet accomplished. In addition, Patrick Harker, president of the Federal Reserve Bank of Philadelphia, intimated that they are not quite finished (with raising rates), but that they are close.

 

US 10-year Treasury bond rates fluctuate around 3.75% after increasing three basis points (bps) to reestablish a six-week high, while the two-year equivalent climbed to its highest level since early November 2022 by reaching 4.62%.

 

Despite this, S&P 500 Futures track Wall Street's bearish closing to highlight the somewhat pessimistic outlook and weigh on the USD/JPY exchange rate, mostly due to the Japanese Yen's (JPY) traditional attraction for risk aversion.

 

Lack of substantial Japanese data/events makes the USD/JPY pair susceptible to US stimuli for direction. The January Retail Sales and Industrial Production figures as well as the February New York Empire State Manufacturing Index should be examined closely.


Suggestion