Forex: BoJ Keeps Heat on Yen – USD/JPY Cracks ¥91, EUR/JPY Over ¥122

RELATED QUOTES

SymbolPriceChange
USDJPY=X100.3010-0.749
EURJPY=X113.0700-0.41
GBPJPY=X130.1850-0.785
AUDJPY=X76.6900-0.255

Forex_BoJ_Keeps_Heat_on_Yen_USDJPY_Cracks_91_EURJPY_Over_122_body_JPY_ToF.png, Forex: BoJ Keeps Heat on Yen – USD/JPY Cracks ¥91, EUR/JPY Over ¥122

Fundamental Forecast for Japanese Yen: Bearish

- Commodity Currencies Soft, Yen Reverses on Strong Chinese Data

- Yen Rallies Post-BoJ – Strength Offers Opportunities to Sell

- SSI: Japanese Yen to Fall Further

The Japanese Yen ended the week as a bottom feeder, finishing only ahead of the Canadian Dollar, while losing significant ground to several of the other majors. Just this week, the Japanese Yen lost -1.98% to the Euro, as the EURJPY finished the week at 122.32. The USDJPY was also stronger, gaining +0.90% to 90.91, as US Treasuries and JGBs diverged, with the former seeing an increase in yield, while the latter remained under pressure (the converse relationship implies that JGBs increased in price). Of course, the centerpiece story to the Yen’s demise – albeit one easily complemented by the global rush into higher yielding and riskier assets, like the S&P 500 – is that the Japanese government is aggressively pushing the Bank of Japan to implement some of the most dovish monetary policies ever implemented during the modern era during a non-crisis (a la 2008/2009) period.

This week was the first week we truly got to see the BoJ ‘walk the walk,’ with a +2.0% yearly CPI target implemented, as well as the promise of further easing (¥13 trillion per month in open-ended asset purchases) starting in January 2014. Initially, this proved positive for the Yen – net positioning remains heavily biased towards Yen weakness – with the currency market’s former safe haven darling rallying into early-Asian trade on Thursday. In fact, this has become a bit of the norm for the Yen: the Yen rallies versus the Euro, the US Dollar, etc. early in the week, then on each Thursday this month, it has absolutely collapsed, taking out formers lows amid the sharp move in the opposite direction. It is of no coincidence that Japanese policymakers have issued pleas for further Yen weakness mid-week either, and with this threat forever looming, we must take a bearish outlook on the Yen

Despite BoJ policy action on Tuesday, officials remained adamant about using the power of rhetoric to push down the Yen, a trend that is likely to continue going forward, especially since the BoJ has only started its insanely dovish approach towards monetary policy. On Thursday, Deputy Economy Minister Yasutoshi Nishimura said that it would not be a “concern” if the USDJPY traded up to 100.00. What makes the Yen’s weakness that much more impressive is that BoJ Governor Masaaki Shirakawa – for lack of a better phrase, a dead man walking in his current position – warned about overly aggressive dovish monetary policy, saying that “Long-term interest rates will spike and erode the effect of monetary easing . . . if people perceive the BOJ as having shifted to a policy of recklessly buying government bonds, focusing narrow-mindedly on achieving +2.0% inflation.” The market has ignored this warning, perhaps for good reason: Japanese Prime Minister Shinzo Abe has made it clear he will appoint a new BoJ Governor, one more sympathetic to his ultra dovish tendencies, when current Governor Shirakawa’s term ends in the spring.

If only to stress the that this is the tip of the BoJ’s dovish iceberg, consider the other options available: accelerating the timeline for open-ended asset purchases; increasing the size of the asset purchases; extending the maturity of bonds under its current asset purchase program; cutting the main interest rate from +0.10% to 0.00% or even negative rates; or cut the interest paid on excess reserves (IOER), to provoke banks into lending further (an effort to stimulate inflation). New measures between now and April, when the new BoJ Governor arrives, are fairly unlikely, unless there is further evidence to suggest that deflation is persisting despite recent policy changes (thereby implying that policy isn’t being taken as credible, which a weaker Yen would resolve as inflation is imported from abroad, or as prices rise on imports as purchasing power erodes).

The data due this week fits into this bearish outlook. Key releases such as Retail Trade (DEC) on Tuesday, Industrial Production (DEC P) on Wednesday, and Household Spending (DEC) on Thursday all forecast to disappoint, according to the DailyFX Economic Calendar. Keep an eye on the newswires for the coming week, as data will provide little reason for traders to shift bias in the face of heavy-handed interference from Japanese policymakers. Fundamentally, the Yen unraveling has just begun, as the end of BoJ independence has arrived. -CV

DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.
Learn forex trading with a free practice account and trading charts from FXCM.

--

Get stories like this on the Yahoo app and discover more every day.
Download it now.
Loading...
  • Gold firms on weak dollar as focus turns to U.S. debate
    Gold firms on weak dollar as focus turns to U.S. debate Reuters - 7 minutes ago

    Gold rose on Monday as a retreat in the dollar helped it build on last week's gains but moves were muted with markets awaiting a U.S. presidential debate for pointers as to the outcome of November's election. The precious metal rose more than 2 … More »

  • AP Top Extended Financial Headlines at 11:29 a.m. EDT Associated Press - 8 minutes ago

    Shares in Deutsche Bank are sharply lower after a report that the German government won't intervene with U.S. officials who are pressing the bank to pay $14 billion to settle an investigation into its ... … More »

  • No sign of oil freeze at home as Russia meets OPEC
    No sign of oil freeze at home as Russia meets OPEC Reuters - 8 minutes ago

    As Russian energy minister Alexander Novak flies to Algeria this week for talks with OPEC on output cuts, developments at home indicate non-OPEC Russia is not preparing for any coordinated production action. Five leading Russian oil companies, … More »

  • Iran downplays chances of oil deal, UAE keen on freeze
    Iran downplays chances of oil deal, UAE keen on freeze Reuters - 9 minutes ago

    Iran downplayed on Monday the chances of OPEC and non-OPEC oil producers clinching an output-restraint deal in Algeria this week even though several other members of the group said they still hoped for steps to tackle a price-eroding glut of crude. … More »

  • Wall Street drops as Pfizer falls; presidential debate eyed
    Wall Street drops as Pfizer falls; presidential debate eyed Reuters - 17 minutes ago

    Pfizer fell 1.6 percent after it decided against splitting into two. While the White House race has so far had little discernible effect on the market, that may soon change as polls show a tightening race ahead of the first debate between Hillary … More »

  • Russia accuses Kiev over MH17 ahead of Dutch probe release
    Russia accuses Kiev over MH17 ahead of Dutch probe release AFP News - 20 minutes ago

    Russia on Monday sought to deflect blame over the downing of Malaysia Airlines flight MH17, accusing Kiev just days before the results of a Dutch criminal probe into the mass-killing are released. Ukraine and the West insist pro-Russian rebels blew … More »

  • Italy warns Swiss over Swiss-first employment referendum Associated Press - 28 minutes ago

    Italian officials warned Monday that Switzerland could face consequences after voters in the border canton of Ticino approved a referendum calling on authorities to grant preference to Swiss workers over ... … More »

  • ECB's Coeure says QE less effective than hoped due to external shocks Reuters - 36 minutes ago

    The European Central Bank's programme of quantitative easing has been less effective than it had hoped as a result of external shocks, ECB Executive Board Member Benoit Coeure said on Monday. Speaking at a conference in Rome, Coeure said that since … More »

  • EU may refuse to sign up to new banking rules - sources
    EU may refuse to sign up to new banking rules - sources Reuters - 46 minutes ago

    FRANKFURT/LONDON (Reuters) - The European Union may opt out of new global rules aimed at preventing another financial crash because officials are worried they put European banks at a disadvantage at a time when they are losing market share to U.S. … More »

  • BMW, Mercedes, and Audi are joining forces to take on Google
    BMW, Mercedes, and Audi are joining forces to take on Google Business Insider - 51 minutes ago

    HERE BMW, Mercedes, and Audi are sharing data to … Continued The post BMW, Mercedes, and Audi are joining forces to take on Google appeared first on Business Insider. … More »

  • Will boom in loans at retailers, manufacturers turn to bust? Associated Press - 57 minutes ago

    They sell diamond rings in malls and used cars at dealerships, make wrench sets for mechanics and giant combines for farmers. Not one has "bank" in its name, but they are all big lenders, and ... … More »

  • Euro zone economy "resilient" despite Brexit vote: Draghi
    Euro zone economy "resilient" despite Brexit vote: Draghi Reuters - 59 minutes ago

    FRANKFURT (Reuters) - The euro zone economy is coping well with global uncertainty, such as Britain's vote to leave the European Union, even if the outlook for external demand has worsened, the president ... … More »

  • Shell Nigeria refuses to confirm oil militants' attack Associated Press - 1 hour 5 minutes ago

    Shell Nigeria refused Monday to confirm a report by the Niger Delta Avengers militant group that it has bombed the company's Bonny oil pipeline and again crippled its exports. Friday night's bombing breaks ... … More »

  • At least 10 Turkish troops killed in PKK attacks
    At least 10 Turkish troops killed in PKK attacks AFP News - 1 hour 10 minutes ago

    Ten members of the Turkish security forces were killed in two separate attacks in southeastern Turkey on Monday blamed on the outlawed Kurdistan Workers' Party (PKK), local media reported. Two soldiers and two village guards -- locals employed to … More »

  • Grain lower, livestock lower Associated Press - 1 hour 10 minutes ago

    Grain futures were lower Monday in early trading on the Chicago Board of Trade. Wheat for December delivery was 7 cents lower at $3.9760 a bushel; December corn was 3.50 cents lower at $3.33 bushel; December ... … More »

  • Global stocks slide back after Fed-inspired rally
    Global stocks slide back after Fed-inspired rally AFP News - 1 hour 12 minutes ago

    World stock markets slumped Monday as enthusiasm over a US Federal Reserve-inspired rally faded, while a crash in Deutsche Bank's shares offset a surge in German business confidence. "It's been a rough start to the week," said ADS Securities London … More »

  • LVMH's digital drive takes time despite Apple hire Reuters - 1 hour 16 minutes ago

    When LVMH hired former Apple music executive Ian Rogers to craft a digital strategy, investors may have hoped for some quick results. Almost a year later, aside from drafting in more digitally-savvy people and taking part in a technology start-up … More »

  • Britain's Boris Johnson on first Turkey trip since Brexit tensions
    Britain's Boris Johnson on first Turkey trip since Brexit tensions AFP News - 1 hour 19 minutes ago

    Boris Johnson on Monday made his first visit to Turkey as Britain's foreign minister, months after leading the successful "Brexit" campaign that played on anti-Turkish sentiments. Johnson, who is of partly Turkish ancestry, began his trip with a … More »

  • OPPENHEIMER: Twitter doesn’t make sense at this price
    OPPENHEIMER: Twitter doesn’t make sense at this price Business Insider - 1 hour 26 minutes ago

    SCOTT EISEN/BLOOMBERG Twitter CEO Jack Dorsey After news … Continued The post OPPENHEIMER: Twitter doesn’t make sense at this price appeared first on Business Insider. … More »

  • Oil rises as OPEC meets, volatility hits post-Doha high
    Oil rises as OPEC meets, volatility hits post-Doha high Reuters - 1 hour 36 minutes ago

    Oil rallied on Monday as the world's largest producers gathered in Algeria to discuss ways to support the market, with nervous trade driving volatility to its highest since exporters met in April. Members of the Organization of the Petroleum … More »

  • Lithuania eyes Norway air defence deal amid Russia fears
    Lithuania eyes Norway air defence deal amid Russia fears AFP News - 1 hour 36 minutes ago

    Lithuania said Monday it is in talks to buy Norwegian anti-aircraft missile systems to address the defence gap on NATO's eastern flank, amid concerns over Russia. … More »

  • Exclusive: Russian oil majors raise output of hard-to-recover crude
    Exclusive: Russian oil majors raise output of hard-to-recover crude Reuters - 1 hour 36 minutes ago

    Russian oil majors Rosneft and Gazprom Neft are raising the share of production from hard-to-recover reserves, to counter declining conventional output, showing the complexities facing producer nations seeking to tackle a global oversupply of crude. … More »

  • Markets Right Now: US stocks open lower Associated Press - 1 hour 52 minutes ago

    The latest on developments in global financial markets (all times local): 9:40 a.m. U.S. stocks are falling Monday morning and following Asian and European indexes lower. Banks and technology companies ... … More »

  • RUBBER-Tokyo futures prices after evening session September 26 Reuters - 1 hour 57 minutes ago

    Following are prices for Tokyo rubber futures at the end of the Tokyo market's evening session on Sep 2016. Contract Day Volume Evening Volume * Sep 175.5 - - - * Oct 172.2 18 170.1 9 * Nov 166.4 30 165.4 ... … More »

  • US shares open lower AFP - 2 hours 0 minutes ago

    Stocks opened lower on Wall Street Monday as traders took profits after last week's surge, opting to wait for new signals on the strength of the economy. But a jump in crude prices on reports that Saudi ... … More »

 
Recent Quotes
Symbol Price Change % Chg 
Your most recently viewed tickers will automatically show up here if you type a ticker in the "Enter symbol/company" at the bottom of this module.
You need to enable your browser cookies to view your most recent quotes.
 
Sign-in to view quotes in your portfolios.

MARKET MOVERS

  • Most Actives
    Most Actives
    NamePriceChange% Chg
    0.138+0.002+1.47%
    N21.SI
    0.74+0.02+2.78%
    BS6.SI
    0.141-0.002-1.40%
    5DM.SI
    0.265-0.005-1.85%
    5ME.SI
    0.355-0.005-1.39%
    E5H.SI
  • % Gainers
    % Gainers
    NamePriceChange% Chg
    0.225+0.025+12.50%
    BTF.SI
    0.475+0.050+11.76%
    AWC.SI
    0.147+0.011+8.09%
    5NF.SI
    0.60+0.04+7.14%
    BDR.SI
    0.195+0.013+7.14%
    43B.SI
  • % Losers
    % Losers
    NamePriceChange% Chg
    0.345-0.060-14.81%
    BLR.SI
    1.16-0.20-14.71%
    P01.SI
    0.164-0.026-13.68%
    AWI.SI
    0.22-0.03-12.00%
    BJD.SI
    0.425-0.055-11.46%
    BLL.SI

Market Data

  • Currencies
    Currencies
    NamePriceChange% Chg
    1.3591+0.001+0.07%
    USDSGD=X
    1.5320+0.0084+0.55%
    EURSGD=X
    1.7641+0.0069+0.39%
    GBPSGD=X
    73.7950-0.327-0.44%
    SGDJPY=X
    5.7047-0.0008-0.01%
    SGDHKD=X
    3.0367+0.0099+0.33%
    SGDMYR=X
    9,585.6240-69.9092-0.72%
    SGDIDR=X
    4.9055-0.0011-0.02%
    SGDCNY=X
    1.0392+0.0042+0.41%
    AUDSGD=X
  • Commodities
    Commodities
    NamePriceChange% Chg
    1,345.10+3.40+0.25%
    GCZ16.CMX
    19.68-0.12-0.63%
    SIZ16.CMX
    95.83+0.06+0.07%
    ^XAU
    2.200.00-0.11%
    HGZ16.CMX
    43.85+0.41+0.94%
    CLV16.NYM
  • Bonds
    Bonds
    TreasuryYield (%)Yield Change
    1.13-0.02
    ^FVX
    1.60-0.02
    ^TNX
    2.33-0.01
    ^TYX