Forex Today: Yen Fall Peaks on BoJ Unlimited Bond Purchase

The Japanese Yen recovered after weakening on high volatility following Bank of Japan intervention.

  • The Forex market has continued to be dominated by a weak Japanese Yen (influenced by the Bank of Japan’s pledge to continue monetary easing until its inflation target of 2% is reached) and a rising US Dollar. The USD/JPY currency pair and other Yen crosses fell very sharply yesterday before recovering, with the USD/JPY briefly trading at a new 6-year high above ¥125. The day’s range was nearly 3 times average volatility, as the Bank of Japan pledged yesterday to purchase an unlimited amount of JGB bonds at 0.25% after the 10-year Yen yield hits 0.245%, the highest rate seen in 6 years. The Japanese finance minister stated that he will be closely watching Yen moves to avoid negative Yen weakness, with the central bank also stating that it would intervene to halt a slide in USD/JPY beyond ¥130.

  • Bitcoin continues to look bullish and advance towards a 7-week high just below $48k.
  • Russian and Ukrainian delegations will begin meeting today in Turkey to discuss a possible ceasefire, although hopes for an agreement any time soon are very low. However the fact that talks are happening seems to have boosted global stock markets a little and decreased the price of crude oil. The Russian invasion of Ukraine is well into its fifth week, with the Russian advance clearly stalled by Ukrainian military force and logistical problems. US President Biden, speaking in Poland over the weekend, called for regime change in Russia before his office walked back the comments.
  • Commodities mostly fell yesterday, especially energies, but cotton closed yesterday at a new multi-year high.
  • Today will see a release of US JOLTS Job Openings data.
  • Daily new coronavirus cases globally fell last week after rising for two weeks in a row. There is a new omicron sub-variant, BA2, which appears to be 30% more infectious, which has been driving a recent increase in infections in some areas.
  • Although official Chinese statistics claim coronavirus infection is falling, the large city of Shanghai is under lockdown.
  • It is estimated that 64.3% of the world’s population has received at least one dose of a coronavirus vaccination, while approximately 6.1% of the global population is known to have contracted the virus at some stage.
  • Total confirmed new coronavirus cases worldwide stand at over 483.8 million with an average case fatality rate of 1.27%.
  • The rate of new coronavirus infections appears to now be increasing only in Australia, Cyprus, China, France, Italy, Laos, Luxembourg, Malta, Monaco, Samoa, Taiwan, Tonga, the UK, and Vanuatu.
Adam Lemon

Adam Lemon began his role at DailyForex in 2013 when he was brought in as an in-house Chief Analyst. Adam trades Forex, stocks and other instruments in his own account. Adam believes that it is very possible for retail traders/investors to secure a positive return over time provided they limit their risks, follow trends, and persevere through short-term losing streaks – provided only reputable brokerages are used. He has previously worked within financial markets over a 12-year period, including 6 years with Merrill Lynch.