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Yoshimura Hirofumi, leader of the Japan Restoration Party: There are major differences with the Liberal Democratic Party on the issue of corporate donations.On October 17, analysts at JPMorgan Chase and Goldman Sachs estimated that the number of initial unemployment claims in the United States may have fallen last week, but many people are still unemployed due to weak hiring. According to their estimates, the number of initial unemployment claims in states fell to 217,000 in the week ending October 11 from 235,000 in the previous week after seasonal adjustment.On October 17, Euro Stoxx 50 index futures fell 0.6%, German DAX index futures fell 1%, and British FTSE index futures fell 0.8%.On October 17th, as news of bank loan defaults hit Wall Street, CNBC commentator Jim Cramer said the latest developments would pave the way for the Federal Reserve to cut interest rates, a move widely anticipated by investors. He said, "Todays market is indeed terrible, but at least we finally have a reason for the Fed to rush to cut rates sooner rather than later: bank loan defaults. Nothing prompts the Fed to act faster than credit losses, as they are a clear signal that the economy is heading for a downturn." On Thursday, US stock indices generally fell as investor concerns grew about the health of regional banks loan books. Cramer pointed out that non-performing loans are an early warning sign that it is time for the central bank to ease monetary policy. The banking system has "sufficiently accrued enough problem loans" within a week, which is enough for the Fed to cut interest rates quickly without worrying too much about inflation. He emphasized that lower borrowing rates not only stimulate the economy generally but also make it easier for borrowers to avoid default.The Bank of Japan index fell 1.88%, leading the decline in Japanese stocks.

With BOJ intervention a possibility and US PMI in focus, USD/JPY is pushing toward 141.00

Daniel Rogers

Sep 23, 2022 14:22

截屏2022-09-23 上午9.44.59.png 

 

The US dollar/Japanese yen exchange rate stands between 142.27 and 142.58 during the Tokyo trading session. Having dropped to a low of less than 141.00, the asset has since reversed course. The major is likely to re-test the 141.00 support level due to the possibility of increased intervention by the Bank of Japan (BOJ) in currency markets to bolster the yen.

 

Due to the BOJ's intention to engage in the currency markets for the first time since 1998, the USD/JPY pair dropped significantly below 141.00. The BOJ has significant tools to maintain support for the yen as the world's second-largest foreign exchange reserve. Since the current price does not reflect the yen's true value, the Bank of Japan decided to step in to prevent further depreciation.

 

After the BOJ made its monetary policy pronouncement, it began intervening in the currency market. To no one's surprise, Bank of Japan Governor Haruhiko Kuroda stayed dovish on interest rates and said that the aggressive approach taken by the Federal Reserve (Fed) will have minimal impact on Japan's economy. He also said that the Japanese economy, which is still recuperating from the consequences of the Covid-19 outbreak, needs more policy easing.

 

Investors are waiting for volatility to diminish after the Fed's extraordinary hawkish attitude, keeping the US dollar index (DXY) stable around 111.30. On Thursday, after the DXY hit a fresh 20-year high of 111.81, sellers emerged and smashed the prevailing bullish pattern.

 

In the future, the S&P Global PMI data will be crucial. It is expected that the Manufacturing PMI would drop to 51.1 from 51.5 in the previous report. The Services PMI will go up to 45.0 from 43.7.


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