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On April 24th, Abhijit Surya, Senior Economist for Asia Pacific at Capital Economics, stated that the Bank of Japan (BOJ) could raise interest rates as early as June. The firm believes that while the BOJ may keep rates unchanged at its meeting next week, the board may send a hawkish signal by raising its overall and core inflation forecasts. Furthermore, the BOJ may reiterate the risks posed by rising inflation expectations, "especially since some corporate inflation expectations indicators in the Tankan survey have already begun to exceed the central banks 2% target level."Crude oil futures continued to rise, with the main contract for low-sulfur fuel oil (LU) up nearly 6%, the main contract for liquefied petroleum gas (LPG) up over 5%, and the main contracts for asphalt, fuel oil, and SC crude oil up over 3%.On April 24, Minister of Commerce Wang Wentao met with Airbus CEO John Faury on April 23. The two sides exchanged views on Airbuss operations and development in China, as well as China-EU economic and trade relations. Wang Wentao emphasized that since the beginning of this year, leaders of several EU countries have visited China, yielding fruitful practical results and demonstrating the resilience and vitality of China-EU economic and trade relations. China is willing to strengthen trade and investment cooperation with the EU and promote the stable and healthy development of China-EU economic and trade relations. However, the EUs recent tightening of trade restrictions on China has damaged the confidence of Chinese companies in investing in Europe and seriously affected normal China-EU economic and trade cooperation. He hoped that Airbus would play a positive role in encouraging the EU to work with China to properly resolve differences through dialogue and consultation.According to Futures News on April 24, as of 09:30 Beijing time, WTI crude oil futures rose 1.38%, while US natural gas futures fell 1.09%.The yield on Japans 40-year government bonds rose 3.5 basis points to 3.860%.

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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