- A few hours ago, the Bank of Japan began an unscheduled bond purchase operation intended to drive down recent increases in sovereign Japanese yields. This had the effect of causing a short-term spike in the Japanese Yen, with the benchmark USD/JPY currency pair reaching ¥148.75 before returning just as quickly to its recent area of price action just below ¥149.80. It seems that the price of this currency pair may attract intervention from the Bank of Japan whenever it gets near ¥150.00, and the price is again not far from this big round number.
- The middle east war remains contained for now. President Biden will shortly arrive in Israel and other western heads of state will also be visiting, although Arab leaders have cancelled their plan meetings with Biden. Most markets have consolidated over the past day, trading sideways.
- The prices of precious metals have continued to rise strongly, with Gold just reaching a near 2-month high in USD terms.
- Trend traders in the Forex market will be most interested in being long USD/JPY which has continued to strengthen. Over the short term, the Australian Dollar is the strongest major currency, while the US Dollar is the weakest.
- US Retail Sales data released yesterday came in stronger than expected, suggesting that the economy is not cooling due to rate hikes as quickly as was anticipated. This might support the Dollar if it gives weight to the case for further rate hikes.
- Canadian CPI (inflation) data released yesterday was lower than expected, showing an annualized rate of only 4.4% when 4.8% was forecasted.
- There will be releases today of UK CPI (inflation) and Australian unemployment data.
Forex Today: Bank of Japan Bond Purchase Sees Yen Spike
Adam Lemon
The Bank of Japan announced an unscheduled bond purchase operation which caused the Yen to briefly spike upwards during the Tokyo session.