9 Dec 2014
JPY supported by more risk-averse trading conditions - BTMU
FXStreet (Barcelona) - Lee Hardman, FX Analyst at the Bank of Tokyo Mitsubishi UFJ, notes that Yen strengthened modestly after gaining support from declining global equities and commodity prices.
Key Quotes
"The yen has continued to strengthen modestly in the Asian trading session with USD/JPY falling back below the 120.00-level after hitting an intra-day high yesterday of 121.85. The yen has strengthened overnight amidst more risk-averse trading conditions as global equity markets and commodity prices have declined."
"The sell-off in risk assets early this week follows the adjustment higher in US short rates and further strengthening of the US dollar late last week after the release of the stronger than expected non-farm payrolls report for November. The increased likelihood of Fed rate hikes next year have prompted heightened concerns over the outlook for global growth especially in emerging economies which are more vulnerable to a tightening of external financing conditions and a stronger US dollar.”
"The US dollar has also pared some its recent gains amidst the sell-off which maybe more a reflection of increasingly elevated long dollar positions. The extended decline in energy prices is also creating more scope for the Fed to delay rate hikes until later in 2015 helping to temporarily offset the inflationary impact from the tightening US labour market which may act as a dampener on US dollar demand in the near-term. However, the case for a stronger US dollar alongside higher short-term US rates still remains in place.”
Key Quotes
"The yen has continued to strengthen modestly in the Asian trading session with USD/JPY falling back below the 120.00-level after hitting an intra-day high yesterday of 121.85. The yen has strengthened overnight amidst more risk-averse trading conditions as global equity markets and commodity prices have declined."
"The sell-off in risk assets early this week follows the adjustment higher in US short rates and further strengthening of the US dollar late last week after the release of the stronger than expected non-farm payrolls report for November. The increased likelihood of Fed rate hikes next year have prompted heightened concerns over the outlook for global growth especially in emerging economies which are more vulnerable to a tightening of external financing conditions and a stronger US dollar.”
"The US dollar has also pared some its recent gains amidst the sell-off which maybe more a reflection of increasingly elevated long dollar positions. The extended decline in energy prices is also creating more scope for the Fed to delay rate hikes until later in 2015 helping to temporarily offset the inflationary impact from the tightening US labour market which may act as a dampener on US dollar demand in the near-term. However, the case for a stronger US dollar alongside higher short-term US rates still remains in place.”