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Currency Market Settles Amidst Morning Adjustments
The USD/JPY temporarily rose to the 141.90 level.
“Morning Adjustment Brings Calmness to Currency Movements”
During the previous weekend, the USD/JPY experienced a temporary surge, reaching the 141.90 level. However, it closed the week’s trading at 141.70 and commenced the new week in the latter half of the 141 range. Notably, Yomiuri Shimbun reported on discussions within the Bank of Japan pertaining to the upper limit of long-term interest rates during the weekend. Despite this, the morning session saw stable movements centered around the 141 range.
Deputy Chief Cabinet Secretary, Mr. Isozaki, expressed his expectations for the Bank of Japan to implement necessary measures in line with the joint statement, which triggered a slight uptick in yen buying, briefly pushing the USD/JPY to 141.35 against the dollar by midday. However, this momentum failed to sustain throughout the day. Subsequently, the afternoon session witnessed a cautious wait-and-see atmosphere, with the market fluctuating around the mid-141 range without any clear direction.
The current week’s agenda is characterized by crucial events, including the FOMC, ECB Governing Council, and Bank of Japan meetings. As a result, the market adopts a prudent stance, leading to limited active movements from the beginning of the week. The prevailing consensus points to a 0.25% rate hike by the FOMC and a similar expectation from the ECB Governing Council, while the Bank of Japan is anticipated to maintain its existing policy. Nevertheless, market participants remain attentive, as statements and press conferences during these meetings could potentially alter the overall outlook, thus causing subdued market conditions until their conclusion.
Meanwhile, the EUR/USD hovers in a confined range near the low 1.11 level, while the EUR/JPY initially spiked to 157.21 from the mid-157 range during the USD/JPY decline but later retraced to the mid-157 range.
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