- The Japanese Yen remains the weakest major currency, continuing to fall as the Bank of Japan avoids any non-verbal intervention while the Yen continues to depreciate. Yesterday saw the USD/JPY currency pair make a new 7-month high above ¥144.50. Trend traders will remain interested in being short of the Japanese Yen, which has also a reached multi-year low yesterday against the Euro. The Governor of the Bank of Japan has defended his ultra-loose monetary policy by pointing out that underlying inflation remains below the Bank’s 2% inflation target, although the headline rate is now above 3%.
- Asian stock markets have mostly traded lower over the past day, with the Hang Seng Index closing firmly lower, while the Nikkei 225 Index is up very slightly.
- In the Forex market, the Australian Dollar has been the strongest major currency over the Asian session, while the Swiss Franc has been the weakest. The US Dollar is continuing to rise today after rallying yesterday, with the Dollar Index beginning to suggest it may soon establish a new long-term bullish trend technically.
- Cocoa futures are continuing to rise to new multi-year highs, attracting trend traders on the long side. The move is driven by strong demand and poor harvests in parts of Africa.
- Bitcoin is still unable to decisively break above the key resistance level at $30,534. If this level continues to hold, a major bearish reversal will become more likely.
- There will be releases today of US Final GDP data (expected to show an annualized GDP increase rate of 1.4%) and unemployment claims.
- There will be a release today of German Preliminary CPI (inflation) data which is expected to show a month-on-month increase of 0.2%.
Forex Today: Japanese Yen Continues to Weaken
Adam Lemon
The Japanese Yen is continuing to depreciate as the Bank of Japan looks unlikely to intervene yet and justifies its ultra-loose monetary policy.