Jump to content

JPY down against basket of G7 currencies


Recommended Posts

As most central banks continue to drive higher rates, the one outlier is the Bank of Japan which is boosting purchases of Japanese bonds. IGTV’s Jeremy Naylor looks at long USD/JPY, EUR/JPY, CAD/JPY, AUD/JPY and GBP/JPY.

 

 

 Jeremy Naylor | Writer, London | Publication date: Wednesday 07 September 2022 

BoJ the outlier

In the context of global policy tightening, the Japanese yen continues to be the area of the market that is being beaten up against the whole basket of currencies ss the Bank of Japan (BoJ) remains convinced its ultra accommodative stance to support the Japanese economy by buying Japanese Government Bonds (JGBs).

And of course, in the face of a stronger US dollar we've seen the BoJ see its currency drop against the whole basket of other currencies around the world. This is causing all sorts of concerns for the Bank ahead of the Beige Book tonight. Fed Fund futures imply a 75-basis point hike at the Fed's next meeting. Now, this is pushing the Japanese yen down heavily against the US dollar.

USD/JPY chart

This is the dollar rising to new 24-year highs against the Japanese yen - a really big move up yesterday for the dollar on this move up in US Treasury yields ahead of the Fed meeting next week.

We've currently tipped over the 144 level. This is the highest point we have seen since 1998 and it continues to move up.

CAD/JPY

In the context of the Canadian Central Bank meeting today, the Canadian dollar may be suffering against the US dollar, but yesterday we saw a beat of the highs we saw back on the 21st of July. And for the Canadian currency this is the highest that we've been here since these levels back here since March 2008.

EUR/JPY

And it doesn't stop there either because other currencies are also far stronger against the Japanese yen.

The euro, which is having all sorts of problems of its own because of the eurozone crisis with energy, is finding it difficult to make any headwind against major currencies apart from the Japanese yen. Yesterday we approached these highs we saw back in the 21st of July. Today we've now seen a new punch higher to new 9-week highs almost against the Japanese yen for the euro. So it's now broken that resistance - it trades at 10-week highs ahead of the European Central Bank (ECB) interest rate decision tomorrow.

AUD/JPY and GBP/JPY

And the markets continue to see other areas where we're seeing other currencies move up not too far away from the highs that we've got.

Against the Aussie dollar you can see we're now challenging this line of resistance at 9688 for the Aussie, rising against the Japanese yen, and indeed sterling which is suffering so much against the yen, moving up there to 16546.

So all major currencies beating the Japanese yen.

Link to comment

Create an account or sign in to comment

You need to be a member in order to leave a comment

Create an account

Sign up for a new account in our community. It's easy!

Register a new account

Sign in

Already have an account? Sign in here.

Sign In Now
  • General Statistics

    • Total Topics
      19,986
    • Total Posts
      87,945
    • Total Members
      69,127
    • Most Online
      7,522
      10/06/21 10:53

    Newest Member
    Elza
    Joined 24/09/22 16:18
  • Posts

    • Hey @pravid17 I hope you're well.  In the leveraged trading industry there are brokers who don't hedge client's exposure and brokers (like ourselves) who do hedge client's exposure.  In a perfect world the exposure of short clients would net off the trades of long clients however this is not always the case. Our hedging model allows us to take an exposure in the underlying market for the remaining exposure which doesn't offset - This way we don't need to hedge every trade, worry about profits of our clients and results in lower costs for hedging in the underlying market (commissions, interest etc.). So say 60% of IG customer exposure in the ASX was long and 40% of exposure on the ASX was short. The 40% would net each other off but there's a remaining 20% of customers who need to be hedged to cover their positions. We go into the market and hedge this.  We make our money primarily through our spreads and overnight funding  with other fees making up a small proportion of our revenue. I would like to remind also that IG is regulated by several bodies globally, including top-tier regulators like the UK's FCA, Germany's BaFIN, Australia's ASIC - This should be quite reassuring from a dealing execution and transparency perspective.  I hope this helps, let me know if you have any other question 
    • A survey from Reviews.org, which featured 1000 Americans, found that as many as 1 in 4 US subscribers may quit the service in the next year.    Jeremy Naylor | Writer, London | Publication date: Friday 23 September 2022  There was an interesting breakdown, but the main reason was affordability. Only 18% said they would move to a cheaper competitor. IGTV’s Jeremy Naylor looks at the numbers. Netflix subscription woes Netflix Inc (All Sessions) could be in for a rough time ahead over the next 12 months if a new survey is anything to go by, which was conducted in the US. Out of the 1,000 adults that took part in this survey undertaken by Reviews.org, around 25% of those that were covered said that they would be cancelling their Netflix subscription within the next 12 months. Now, it says with that 25% of US subscribers to Netflix considering leaving, not to join a competitor, but mostly because of pressures on household bills. This is how it is split: rising cost of subscriptions - 40% inflation - 20% a lack of content - 22% spending more time on the services of others - 18% So you can see, a minority said they were going to other services, such as those provided by Disney Plus or Amazon Prime. The cost of Netflix has risen dramatically this year as its basic plan increased by 11% in January and its other plans by 20% to 25%. Now these were the first price increases for three years, so that itself is relatively new for a lot of subscribers. Netflix share price Let's take a look at the Netflix share price. You can see on the far left hand side of this chart the COVID lows at $290.39. We saw a whacking great increase there of 141% to the top and the record high in Netflix shares back in November 2021. And that was when subscriptions were rising, people were paying more for their services, and it was all humming beautifully. And then all of a sudden people started questioning the numbers of streaming services they were undertaking with some deciding to withdraw from Netflix. All of a sudden the big drops started coming through with profit warnings and sales warnings. We've recently hit a new low of $162.50. Since then there has been a little bit of an increase. We're currently trading at $232.75, but we are down by a margin of 1.75% in today's session, which reflects this news that we could well see a relatively large drop in subscribers for Netflix in the US within the next 12 months.
    • Market data to trade the week of 26 September: Nasdaq; NXT From the economic calendar next week IG technical analyst, Axel Rudolph, picks up on a short trade on the Nasdaq around US inflation data. Meanwhile, despite another light week of corporate data, Axel picks out the chart of Next plc (NXT) as an interesting trade to think about.          
×
×
  • Create New...