2 min to read
A persistent demand for the Japanese Yen is evident
as the market braces for the upcoming Bank of Japan meeting next week.
“In the current forex landscape, a persistent yen buying trend is discernible, driven by anticipation of the upcoming Bank of Japan meeting next week”
During the early London session, a retreat in US bond yields undid the earlier gains witnessed in Tokyo, resulting in the USD/JPY pair extending its decline from approximately 142 yen to the vicinity of 141.47. Simultaneously, European currencies showcase diverse movements. The Euro-to-Dollar pair encountered selling pressure following the release of weaker-than-expected preliminary December Eurozone PMI figures, sliding from its prior day’s closing near 1.0990 to briefly dip below 1.0950. Euro-to-Yen also faced downward pressure, slipping from around 156 yen to just below 155 yen. Conversely, the Pound-to-Dollar pair encountered some initial selling, only to reverse its trajectory after December UK Services PMI surpassed expectations. It rallied from the mid-1.27 range to approximately 1.2790. Despite the yen buying pressure, Pound-to-Yen managed to recover from a dip below 180.50, returning to the 181 yen range. The prevailing sentiments in the market include Euro selling and Pound buying.
The German Bundesbank significantly revised down its economic growth outlook for Germany next year, lowering it from +1.2% to +0.4%. Following the conclusion of the ECB Governing Council meeting the previous day, ECB members, including Taka Ito and Haruhiko Kuroda, presented their perspectives. There was unanimous acknowledgment of the necessity to maintain the current interest rate levels for an extended period.
The USD/JPY pair is currently trading in the mid-141 range. After being bought to around 142.47 in the Tokyo morning, it encountered selling pressure. The pair extended its decline to near 141.47 in the early London hours, displaying volatility within the range of the previous day’s closing levels. The US 10-year bond yield rose from the mid-3.92% range to around 3.96% in the Tokyo morning but reversed its trajectory, falling to the mid-3.91% range in the early London session.
The Euro-to-Dollar pair is trading in the upper 1.09 range. After briefly reaching a high near 1.1004 in the Tokyo afternoon, the pair encountered resistance. During the London hours, weak preliminary December PMI figures for the Eurozone, particularly from Germany and France, intensified selling pressure, resulting in a new low near 1.0946. Euro-to-Yen reached a high near 156.49 in the Tokyo morning and dipped to around 155.08 in the early London session, remaining near the lower levels. Euro selling dominates against the Pound.
The Pound-to-Dollar pair is trading in the mid-1.27 range. After reaching a low near 1.2740 in the early London hours, it rebounded on better-than-expected December UK Services PMI, reaching around 1.2790. Pound-to-Yen faced resistance due to Yen buying, dipping to around 180.47 in the early London hours after touching a high near 181.74 in the Tokyo morning. However, it recovered back to the 181 yen range. Euro-to-Pound faced selling, declining from near the previous day’s closing level around 0.8610 to briefly dip to around 0.8571.
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