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On September 10th, statistics from 58 Anjuke Research Institute showed that in the first seven days of September this year, the transaction volume of new homes in 13 key first- and second-tier cities was generally higher than the same period last year. Among them, the transaction volume in all four first-tier cities increased year-on-year, while the growth in second-tier cities varied, with Nanjing, Wuhan, and Ningbo all recording positive growth in new home transactions. The second-hand housing market was generally positive; in the 12 cities surveyed by the institute, the transaction volume of second-hand homes in the first seven days of this month all showed positive year-on-year growth. Data released by the China Index Academy also showed that from the end of August to the beginning of September, the housing market in key cities heated up. The institute pointed out that in the 36th week of this year (August 30th to September 5th), the transaction volume of new homes in 30 cities increased by 1.5% month-on-month and 20.8% year-on-year; the transaction volume of second-hand homes in 20 cities decreased slightly month-on-month but increased by 16.9% year-on-year.South Korean Foreign Minister: Will meet with US Secretary of State Rubio in September.According to the Wall Street Journal, sources say South Koreas investment is expected to include approximately $20 billion in a Texas natural gas power plant. South Korea may pay more than $2 billion in initial seed funding by the end of this month.According to the Wall Street Journal, sources say South Korea is in final-stage discussions with the United States to build up to eight nuclear reactors in the country based on Westinghouse designs.On September 10th, Eburys Chief FX Strategist, Roman Zyrulke, stated that the impact of the US Treasurys increased intervention on the US dollar may be more lasting than its effect on yields themselves. The initial intention of repurchase operations was not to solve the deficit problem; however, the markets interpretation of why the Treasury felt the need to intervene and resort to unconventional means has itself become a source of risk premium. This deviates from the traditional economic logic that rising yields typically support the domestic currency exchange rate by attracting capital inflows. Conversely, despite the rising yields, the dollar remains weak because investors increasingly see it as a sign of fiscal and institutional pressure rather than a strong economic performance.

As traders anticipate US CPI, USDJPY maintains a defensive position and trades above 146,000

Alina Haynes

Nov 10, 2022 18:32

截屏2022-11-10 下午4.21.43.png 

 

The USDJPY pair struggles to benefit on yesterday's modest rebound from the 145.15-145.10 support zone, or an almost two-week low, and confronts fresh supply on Thursday. During the early European session, the pair maintains a defensive posture and is currently trading marginally above the 146.00 round number at the daily low.

 

A small decrease in the U.S. dollar, along with repositioning activity ahead of significant U.S. macroeconomic data, drives some USDJPY sales. Traders are reluctant to place aggressive bets ahead of Thursday's release of the latest US consumer inflation data, so the downside remains contained. The crucial US CPI report will play a key role in determining the Fed's policy tightening path, which should influence the near-term USD price dynamics and provide a fresh impetus to the major's direction.

 

The markets continue to price in a rate hike of at least 50 basis points in December. In contrast, the Bank of Japan has not yet indicated an intention to raise interest rates. In addition, the BoJ remains committed to maintaining the 10-year bond yield at 0%. Thursday, Governor Haruhiko Kuroda of the Bank of Japan emphasized that the central bank must continue to support a feeble economic recovery with a liberal monetary policy. Kuroda remarked that economic uncertainty is fairly significant and that negative interest rates can be further decreased if necessary.

 

This is a big contrast to a more hawkish Federal Reserve and increases the probability of USDJPY purchases. In addition, the BoJ governor's rejection of aspirations for a direct intervention in the foreign exchange market to preserve the domestic currency gives credence to the bullish perspective. Therefore, any potential decrease may continue to attract some buyers and is likely to be restricted for the time being. A decisive breach below the psychological threshold of 145.00, however, would invalidate the positive outlook.

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