Forex Today: Yen Stabilizes After BoJ Threatens Intervention

Adam Lemon

The Bank of Japan threatens to prop up the Yen and the rapid weakening of the currency has at least paused.

  

  1. The Japanese Yen, which has weakened dramatically over recent weeks and months, has begun to stabilize after the Bank of Japan reportedly conducted a rate check late in the Asian session yesterday to signal its preparation to intervene in favour of the Yen, after the USD/JPY currency pair rose very strongly to again approach close to the ¥145 level. Some market players are betting on a Yen rally, but many analysts think the Bank of Japan will be unable to halt the Yen’s eventual continued depreciation with the tools they are prepared to use.
  2. In the Forex market, the US Dollar remains strong following the release of US CPI (inflation) data on Tuesday which showed prices increased by 0.1% month-on-month when they had been expected to fall, creating an annualized rate of 8.3%, slightly down on last month’s 8.5% but higher than the 8.1% which had been expected. The 2-Year Treasury yield yesterday reached a new multi-year high at 3.83% and a deepening in the inverted yield curve.
  3. UK CPI (inflation) data released yesterday showed inflation a fraction lower than expected and dropping slightly, coming in at an annualized rate of 9.9%.
  4. Stock markets have mostly halted their falls, but still look generally weak.
  5. New Zealand GDP data came in much better than had been widely expected, showing an increase of 1.7% in the last quarter compared to a consensus forecast of 1%. The news had little effect upon the New Zealand Dollar.
  6. Australian unemployment data came in slightly worse than had been expected, with the unemployment rate increasing from 3.4% to 3.5%.
  7. There will be a releases of US retail sales data and the empire state manufacturing index today.
  8. The Swedish Prime Minister has resigned as counting is almost completed in Sweden, with results showing her left-wing coalition has failed to retain a majority in parliament. It is expected that a centre-right coalition will now take power.
  9. Daily new coronavirus cases globally dropped last week for the eighth consecutive week, giving rise to the hope that the pandemic is finally over in any meaningful sense.
  10. It is estimated that 67.9% of the world’s population has received at least one dose of a coronavirus vaccination, while approximately 7.8% of the global population is confirmed to have contracted the virus at some time, although the true number is highly likely to be much larger.  
  11. Total confirmed new coronavirus cases worldwide stand at over 615.5 million with an average case fatality rate of 1.06%.  
  12. The rate of new coronavirus infections appears to now be significantly increasing only in Taiwan and Russia.  
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.
Learn more from Adam in his free lessons at FX Academy

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