- The US Dollar remains strong although subdued as this week opens, with weakness in the Japanese Yen driving the price of the USD/JPY currency pair above ¥145 towards the end of today’s Tokyo session. The Japanese Finance Minister Suzuki commented “we will respond appropriately against sharp FX moves, which are undesirable”. This pushed the price back below ¥145 but the price is still looking likely to rise over the coming hours. If it continues to advance, firmer intervention methods are expected from the Bank of Japan.
- In the Forex market, the commodity currencies (AUD, NZD, CAD) are currently strong, while the Japanese Yen is clearly the weakest major currency.
- WTI Crude Oil has surged to over $82 per barrel on a rumour that OPEC will agree at its meeting later this week to slash production by 1 million barrels per day to boost prices.
- Stock markets have been mixed so far today, with the Japanese Nikkei 225 Index trading higher, the S&P 500 Index weakening slightly, and the Chinese HSI hitting yet another 10-year low price.
- The first round of the Brazilian presidential election saw the leftist candidate Lula come in ahead of Bolsonaro with 48% to 43%. The two candidates now face a runoff in four weeks in which Lula will be favourite to win.
- There will be a release later today of Swiss CPI (inflation) data. Analysts are expecting a month-on-month increase of 0.1%. If the data is notably off the estimate, this could cause volatility in the Swiss Franc.
- There will be a release later today of US ISM Manufacturing PMI data. Analysts are expecting a month-on-month increase of 0.1%.
- It is a public holiday today in Germany.
- Daily new coronavirus cases globally dropped last week for the eleventh consecutive week, giving rise to the hope that the pandemic is finally over in any meaningful sense.
- It is estimated that 68% of the world’s population has received at least one dose of a coronavirus vaccination, while approximately 7.9% 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.
- Total confirmed new coronavirus cases worldwide stand at over 623.4 million with an average case fatality rate of 1.05%.
- The rate of new coronavirus infections appears to now be significantly increasing only in Austria, Germany, and Taiwan.
Forex Today: Japanese Finance Minister Threatens Intervention as USD/JPY Breaks ¥145
Adam Lemon
The Japanese monetary authorities are again threatening to intervene to prop up a weakening Yen, as USD/JPY trades above ¥145.