JPY down against basket of G7 currencies
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.
(Video Transcript)
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.
This information has been prepared by IG, a trading name of IG Markets Limited. In addition to the disclaimer below, the material on this page does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. IG accepts no responsibility for any use that may be made of these comments and for any consequences that result. No representation or warranty is given as to the accuracy or completeness of this information. Consequently any person acting on it does so entirely at their own risk. Any research provided does not have regard to the specific investment objectives, financial situation and needs of any specific person who may receive it. It has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such is considered to be a marketing communication. Although we are not specifically constrained from dealing ahead of our recommendations we do not seek to take advantage of them before they are provided to our clients. See full non-independent research disclaimer and quarterly summary.
Start trading forex today
Find opportunity on the world’s most-traded – and most-volatile – financial market.
- Trade spreads from just 0.6 points on EUR/USD
- Analyse with clear, fast charts
- Speculate wherever you are with our intuitive mobile apps
See an FX opportunity?
Try a risk-free trade in your demo account, and see whether you’re onto something.
- Log in to your demo
- Take your position
- See whether your hunch pays off
See an FX opportunity?
Don’t miss your chance – upgrade to a live account to take advantage.
- Get spreads from just 0.6 points on popular pairs
- Analyse and deal seamlessly on fast, intuitive charts
- See and react to breaking news in-platform
See an FX opportunity?
Don’t miss your chance. Log in to take your position.
Live prices on most popular markets
- Equities
- Indices
- Forex
- Commodities
Prices above are subject to our website terms and agreements. Prices are indicative only. All share prices are delayed by at least 15 minutes.
Prices above are subject to our website terms and agreements. Prices are indicative only. All shares prices are delayed by at least 15 mins.
