Results for: Japanese yen

The European Central Bank’s (ECB) latest report highlights a decline in the euro’s share in foreign exchange holdings. In 2023, the euro’s share dropped to 20%, driven by factors such as the rising popularity of the US dollar, Japanese yen, and other non-traditional reserve currencies. The ECB also notes that the Swiss National Bank has significantly reduced its euro-denominated reserves. Despite rising interest rates in the eurozone, the currency’s attractiveness has not improved due to higher rates in other regions and the eurozone’s muted economic prospects. The report also expresses concerns about Russia’s plans to reduce its euro stockpile, which could further impact the currency’s status in global foreign exchange reserves.

The US dollar retreated from recent highs, trading slightly lower ahead of the release of key economic indicators. Meanwhile, the Japanese yen continued its decline, falling to its lowest point against the dollar since 1990. The broader economic landscape remains a key driver for currency movements, with the dollar expected to maintain its dominance until signs of a slowdown in US economic exceptionalism emerge.

The USD/JPY currency pair is attracting attention today due to the upcoming expiration of options contracts at the 155.85 level, highlighting the cautious stance of buyers testing the limits of Japanese officials.

USD/JPY buyers are cautiously pushing the pair higher above 155.00, eyeing the 160.00 level as Japanese authorities shift their focus. However, the pace of yen decline remains a concern, prompting caution among buyers. The Bank of Japan’s policy decision tomorrow, including Governor Ueda’s press conference, will be closely watched for insights on the yen’s direction.

Japan’s Chief Cabinet Secretary Hirokazu Matsuno has warned that the Japanese yen is approaching its highest levels in 34 years against the US dollar. The USD/JPY currency pair is currently trading near 155.40, close to the peak reached in 1988. Matsuno’s comments come amidst growing concerns about the yen’s rapid depreciation, which has been driven by a widening interest rate differential between Japan and the United States. The Bank of Japan has maintained an ultra-accommodative monetary policy, while the Federal Reserve has aggressively raised interest rates to combat inflation.

Bank of America (BoA) has issued a warning that the USD/JPY currency pair could rapidly climb to 160, citing the Bank of Japan’s (BoJ) limited ability to curb the yen’s rapid descent through communication alone. Despite the BoJ’s previous acknowledgment of the potential impact of a weakened yen on monetary policy and inflation, BoA believes that such statements are unlikely to provide sufficient support for the Japanese currency.

Japan Airlines (JAL) CEO Mitsuko Tottori has expressed concerns about the current weakness of the Japanese yen, stating that a stronger exchange rate of around 130 yen to the dollar would be more favorable for the airline. She emphasized that the majority of JAL’s expenses are in foreign currencies, making the weak yen a pressing issue. Tottori also highlighted the negative impact of the weak yen on outbound travel. Despite Airbus receiving a larger share of JAL’s recent aircraft order, Tottori emphasized that the airline will seek a balanced approach, ensuring that Boeing orders are delivered on time and meeting business requirements.

Traders remain cautious in the foreign exchange market, particularly regarding the USD/JPY pair. Speculation about potential intervention by the Bank of Japan (BOJ) is deterring aggressive activity, as traders await further guidance on Friday. The Australian dollar (AUD) has made slight gains, but AUD/USD remains limited. Analysts advise caution due to the high risk associated with yen trades. As traders observe the market, a gradual rise in prices is expected, potentially reaching 155.00. However, profit-taking and a possible overshoot could trigger intervention by Japan.

The Japanese Yen (JPY) has experienced a surge in value, reaching a daily high of 154.94. This notable increase has not gone unnoticed by Japanese authorities, who are monitoring the situation closely. Market analysts believe that the JPY’s rally could potentially overshadow other market developments, making it the primary focus of trading activity today.

European markets are trending upward today, buoyed by positive business activity indicators and a slight cooling in the U.S. economy. Tesla’s announcement of new models in the coming year has boosted its stock by 13% after-hours, despite a decline in profits and revenue. The Australian dollar has rebounded, reaching its 200-day moving average against the U.S. dollar due to an inflation surprise. However, the Japanese yen remains at 34-year lows, raising concerns about potential intervention from the government, similar to the action taken in 2022. Key events for the day include the release of the German Ifo survey, as well as earnings reports from companies such as Meta and Boeing.