Japanese Yen improves as 10-year JGB yield remains stable, US CPI awaited


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  • The
    Japanese
    Yen
    strengthens
    as
    overseas
    investors
    anticipate
    the
    BoJ
    raising rates
    in
    July.

  • The
    Japanese
    government’s
    10-year
    JGB
    yield
    remains
    stable
    at
    around
    1.09%,
    close
    to
    its
    recent
    high
    of
    1.10%.

  • Fed
    Chair
    Powell
    highlighted
    the
    urgent
    need
    to
    monitor
    the
    deteriorating
    labor
    market.

The
Japanese
Yen
(JPY)
edges
higher on
Thursday,
possibly
driven
by
the
rising
speculation
that
the
Bank
of
Japan
(BoJ)
might
raise
interest
rates
at
its
upcoming
July
meeting.
This
development
supported
the
JPY
while
weakening
the

USD/JPY
pair
.

The
Japanese
government’s
10-year
JGB
yield
holds
steady
at
approximately
1.09%,
near
its
peak
of
1.1%
recorded
on
July
3.
The
stability
comes
amidst
selling
pressure
on
Japanese
government

bonds
,
reflecting
overseas
investors’
anticipation
that
the
Bank
of
Japan
may
raise
interest
rates
in
response
to
a
weakening
Japanese
Yen,
as
reported
by
Nikkei
Asia.

The
US
Dollar
(USD)
weakened,
likely
impacted
by
lower
US
Treasury
yields.

Fed

Chair
Jerome
Powell
highlighted
the
urgent
need
to
monitor
the
deteriorating
labor
market
on
Wednesday
while
expressing
optimism
about
the
downward
trajectory
of
inflation.

Traders
are
now
eyeing
the
upcoming
US

Consumer
Price
Index

(CPI)
data
for
June,
scheduled
for
release
on
Thursday,
for
more
clarity
on
the
Federal
Reserve’s
(Fed)
monetary
policy
direction.

Daily
Digest
Market
Movers:
Japanese
Yen
improves
amid
hawkish
sentiment
surrounding
the
BoJ

  • Peter
    Boockvar,
    chief
    financial
    officer
    at
    US-based
    Bleakley
    Financial
    Group,
    said
    that
    the
    Yen’s
    weakness
    will
    trigger
    the
    BoJ
    to
    “react
    sooner
    rather
    than
    later,”
    per
    Reuters.
  • Reuters
    reported
    on
    Wednesday,
    citing
    unnamed
    sources,
    the
    Bank
    of
    Japan
    will
    likely
    trim
    this
    year’s
    economic
    growth
    forecast
    and
    project
    inflation
    will
    stay
    around
    its
    2%
    target
    in
    coming
    years
    at
    its
    meeting
    this
    month.
  • Fed
    Chair
    Jerome
    Powell
    stated
    in
    his
    Congressional
    testimony
    on
    Tuesday,
    “More
    good
    data
    would
    strengthen
    our
    confidence
    in
    inflation.”
    Powell
    emphasized
    that
    a
    “Policy
    rate
    cut
    is
    not
    appropriate
    until
    the
    Fed
    gains
    greater
    confidence
    that
    inflation
    is
    headed
    sustainably
    toward
    2%.”
    He
    also
    noted
    that
    “first-quarter
    data
    did
    not
    support
    the
    greater
    confidence
    in
    the
    inflation
    path
    that
    the
    Fed
    needs
    to
    cut
    rates.”
  • According
    to
    a
    Bloomberg
    report
    on
    Tuesday,
    the
    Bank
    of
    Japan
    is
    conducting
    three
    in-person
    meetings
    with
    banks,
    securities
    firms,
    and
    financial
    institutions
    over
    the
    next
    few
    days.
    The
    purpose
    of
    these
    meetings
    is
    to
    assess
    a
    feasible
    pace
    for
    scaling
    back
    its
    purchases
    of
    Japanese
    Government
    Bonds.
  • On
    Tuesday,
    Japan’s
    Finance
    Minister
    Shunichi
    Suzuki
    underscored
    the
    significance
    of
    maintaining
    fiscal
    discipline
    to
    bolster
    confidence
    in
    long-term
    fiscal
    health.
    Suzuki
    also
    mentioned
    monitoring
    closely
    the
    discussions
    at
    the
    BoJ
    meeting
    concerning
    the
    bond
    market,
    as
    reported
    by
    Reuters.
  • The
    Japanese
    Yen
    may
    struggle
    due
    to
    overseas
    asset
    purchases
    by
    Japanese
    individuals
    through
    the
    newly
    revamped
    tax-free
    investment
    scheme,
    the
    Nippon
    Individual
    Savings
    Account
    (NISA)
    program.
    According
    to
    Nikkei
    Asia,
    the
    scale
    of
    these
    purchases
    is
    expected
    to
    exceed
    the
    country’s
    trade
    deficit
    during
    the
    first
    half
    of
    this
    year.
  • Japan’s
    Ministry
    of
    Finance
    reported
    on
    Monday
    that
    Japanese
    investment
    trust
    management
    companies
    and
    asset
    management
    firms
    bought
    ¥6.16
    trillion
    ($38
    billion)
    more
    in
    offshore
    equities
    and
    investment
    fund
    shares
    than
    they
    sold
    during
    the
    first
    six
    months
    of
    the
    year.

Technical
Analysis:
USD/JPY
hovers
around
161.50

USD/JPY
trades
around
161.60
on
Thursday,
maintaining
an
upward
trajectory
within
an
ascending
channel
pattern,
indicating
a
bullish
bias
according
to
daily
chart
analysis.
Supporting
this

outlook
,
the
14-day
Relative
Strength
Index
(RSI)
sits
just
below
the
70
level,
suggesting
potential
overbought
conditions.
A
breach
above
this
level
could
signal
a
need
for
caution
and
a
possible
correction.

The
USD/JPY
pair
may
aim
for
psychological
resistance
near
163.00,
located
at
the
upper
boundary
of
the
ascending
channel.
A
successful
breakout
above
this
level
could
reinforce
bullish
sentiment,
potentially
pushing
the
pair
toward
significant
resistance
around
163.50.

Conversely,
initial
support
is
expected
around
the
21-day
Exponential
Moving
Average
(EMA)
at
160.13.
A
drop
below
this
level
might
trigger
selling
pressure,
testing
the
lower
boundary
of
the
ascending
channel
near
the
psychological
level
of
160.00.
A
further
decline
below
this
channel
support
could
see
the
pair
revisiting
June’s
low
around
154.55.

USD/JPY:
Daily
Chart


Japanese
Yen
PRICE
Today

The
table
below
shows
the
percentage
change
of
Japanese
Yen
(JPY)
against
listed
major
currencies
today.
Japanese
Yen
was
the
strongest
against
the
US
Dollar.

  USD EUR GBP JPY CAD AUD NZD CHF
USD   -0.07% -0.09% -0.05% -0.04% -0.22% -0.27% -0.07%
EUR 0.07%   -0.01% 0.04% 0.04% -0.14% -0.19% 0.00%
GBP 0.09% 0.00%   0.04% 0.06% -0.13% -0.18% 0.04%
JPY 0.05% -0.04% -0.04%   0.00% -0.18% -0.27% -0.02%
CAD 0.04% -0.04% -0.06% -0.00%   -0.21% -0.24% -0.03%
AUD 0.22% 0.14% 0.13% 0.18% 0.21%   -0.06% 0.15%
NZD 0.27% 0.19% 0.18% 0.27% 0.24% 0.06%   0.22%
CHF 0.07% -0.01% -0.04% 0.02% 0.03% -0.15% -0.22%  

The
heat
map
shows
percentage
changes
of
major
currencies
against
each
other.
The
base
currency
is
picked
from
the
left
column,
while
the
quote
currency
is
picked
from
the
top
row.
For
example,
if
you
pick
the
Japanese
Yen
from
the
left
column
and
move
along
the
horizontal
line
to
the
US
Dollar,
the
percentage
change
displayed
in
the
box
will
represent
JPY
(base)/USD
(quote).