Yen Plunges Amidst BoJ's Speculations; Fresh Selling Seen in Sterling
| Action Insight Mid-Day Report 7-21-23 |
Yen Plunges Amidst BoJ's Speculations; Fresh Selling Seen in Sterling |
Japanese Yen experienced a sharp fall today after reports emerged suggesting that BoJ is "leaning towards" maintaining its current yield curve control policy unchanged in the upcoming meeting next week. The development has come in the wake of Japanese inflation data for June, which showed a relatively unchanged yet high level. Notably, 10-year JGB yield is presently trading comfortably below 0.5%, eliminating any necessity even to adjust the yield cap. This has intensified the pressure on Yen, leading to a significant downward shift. Meanwhile, Canadian Dollar lost ground after release of weaker-than-expected retail sales data. Sterling, which exhibited relative stability earlier today, faced fresh selling pressure in early US session. Despite these developments, Australian Dollar and New Zealand Dollar are currently underperforming even more, edging out only the beleaguered Yen. On the other end of the spectrum, Swiss Franc currently occupies the strongest position for the day, followed by Dollar and the Euro. Technically, GBP/USD's break of 1.2847 support argues that it's already in correction to rise from 1.2306 at least. Deeper fall would be seen to 55 D EMA (now at 1.2692), or even below. Downside momentum in GBP/USD would be affected by whether EUR/GBP could power through 0.8717 support turned resistance to confirm bullish trend reversal. In Europe, at the time of writing, FTSE is up 0.29%. DAX is down -0.33%. CAC is up 0.41%. Germany 10-year yield is down -0.0266 at 2.461. Earlier in Asia, Nikkei dropped -0.57%. Hong Kong HSI rose 0.78%. China Shanghai SSE dropped -0.06%. Singapore Strait Times rose 0.12%. Japan 10-year JGB yield rose 0.0063 to 0.466. |
USD/JPY Mid-Day Outlook Daily Pivots: (S1) 139.29; (P) 139.90; (R1) 140.67; More... Intraday bias in USD/JPY stays on the upside at this point. Rise from 137.22 should extend to retest 145.05 high first. Firm break there will resume larger rise from 127.20 to 61.8% projection of 129.62 to 127.22 from 145.06 at 146.76 next. On the downside, below 139.74 minor support will bring retest of 137.22 instead. | |
| GMT | Ccy | Events | Actual | Forecast | Previous | Revised |
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| 23:01 | GBP | GfK Consumer Confidence Jul | -30 | -26 | -24 | | 23:30 | JPY | National CPI Y/Y Jun | 3.30% | 3.20% | 3.20% | | 23:30 | JPY | National CPI Core Y/Y Jun | 3.30% | 3.30% | 3.20% | | 23:30 | JPY | National CPI Core-Core Y/Y Jun | 4.20% | 4.20% | 4.30% | | 06:00 | GBP | Retail Sales M/M Jun | 0.70% | 0.20% | 0.30% | 0.10% | | 06:00 | GBP | Public Sector Net Borrowing (GBP) Jun | 17.7B | 20.7B | 19.2B | 15.8B | | 12:30 | CAD | Retail Sales M/M May | 0.20% | 0.50% | 1.10% | 1.00% | | 12:30 | CAD | Retail Sales ex Autos M/M May | 0.00% | 0.20% | 1.30% | 1.20% | | 12:30 | CAD | New Housing Price Index M/M Jun | 0.10% | 0.00% | 0.10% |
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