Monday , August 20 2018
Home » Blogs » THE INSIDE JAPAN COLUMN: Yen Slump per Euro Steadies, Bonds Eye Linker Sale: Inside Japan

THE INSIDE JAPAN COLUMN: Yen Slump per Euro Steadies, Bonds Eye Linker Sale: Inside Japan

Yen Slump per Euro Steadies, Bonds Eye Linker Sale: Inside Japan

(Bloomberg) — Yen steadies against euro after falling to lowest since early 2016, as positive risk positive sentiment encouraged buying of yen crosses which is expected to help underpin the dollar against the Japanese currency. Bond market will likely see decent demand for inflation-linked bond auction.

  • USD/JPY at 110.72 after rising to high of 110.98 on Wednesday
    • Pair faces technical resistance at 100-DMA at 111.42 and Ichimoku cloud base at 111.36
    • USD fell to lowest since Jan. 2015 vs euro Wednesday as European economy strengthens
  • “With EUR/JPY looking technically bullish and stocks’ rally not accompanied by rising yields, dollar will be weighed down while yen crosses will climb. EUR/JPY may eventually rise to around 135. Risk positive sentiment pulling yen crosses higher may help push USD/JPY up, with a bit of dollar buying on expectations ahead of Friday’s payrolls,” says Yoshinori Aoki, head of FX/monetary trading at Sumitomo Mitsui Banking in New York
    • Focus is on EUR/JPY as buying of pair will underpin USD/JPY while dollar weakness trend is intact: Aoki
    • EUR/JPY steady at 131.24 after hitting highest since February 2016 at 131.40 on Wednesday
  • U.S. 10-year Treasury yield rose 2bps to 2.27% on Wednesday
    • U.S. nonfarm payrolls for July due Friday expected to add 180,000 jobs
  • San Francisco Fed president Williams and Boston Fed president Rosengren signaled Wednesday that policy makers may announce timing of the balance-sheet unwind when they meet next month, as economy shows itself strong enough to withstand return to more normal monetary policy
  • St. Louis Fed president Bullard said in interview with MNI that “given the inflation outlook, which has deteriorated in 2017, I would not support further moves in the near term” while Cleveland Fed president Mester said she’d lowered her estimate of inflation’s trigger point

BONDS

  • JGB futures ended overnight session down 0.01 at 150.15
  • Japan auctions 10-year inflation-linked bonds, results at 12:45pm
    • Japan sells 3-month treasury bills, results at 12:35pm
  • “Linker auction is likely to draw decent demand as Japan’s core CPI could rise towards 1 percent this year, making current BEI below 40bps attracvie, though the impact to the market from the auction result will likely be limited. JGB market is likely to start on a weaker tone,” Katsutoshi Inadome, senior fixed-income strategist at Mitsubishi UFJ Morgan Stanley Securities in Tokyo, writes in note
  • Weekly securities transactions data due at 8:50am; Japanese were net buyers of 1.18b yen of foreign bonds in week to July 21
  • Prime minister Abe will reshuffle his cabinet
  • Chiba Bank, Japan’s second-largest regional bank, is cautious of risks of rising bond yields at home and abroad, putting it in dilemma of seeking products to invest

–With assistance from Mika Otsuka. To contact the reporter on this story: Chikako Mogi in Tokyo at cmogi@bloomberg.net To contact the editors responsible for this story: Tan Hwee Ann at hatan@bloomberg.net Garfield Reynold

About Makkaba Co., Ltd.

Makkaba Co., Ltd.

Hotline: (+84)(0) 904935786; Tel.: (+84) (0)28.35208726
Email: m2mtradingsignals@gmail.com - Phone:

Check Also

Economic Calendar – Top 5 Things To Watch This Week

Economic Calendar – Top 5 Things To Watch This Week Investing.com – Trade talks between …

USD/JPY in forming C leg, looking for rebound

USD/JPY in forming C leg, looking for rebound   USD/JPY after ended its 5th wave …

Leave a Reply

Your email address will not be published. Required fields are marked *