29 Jan 2014
AUD/JPY falls on EM risk fears
FXstreet.com (London) - AUD/JPY has fallen through the day on a global risk off trade fuelled by EM uncertainty.
JPY has seen some selling yesterday after the Turkish central bank voted to kike rates in an effort to stave off further TRY weakness. However, TRY bearishness resumed today, increasing haven demand for the yen. The South African Reserve Bank then added to EM central bank activism with an unexpected rate hike.
Turkey remains in trouble
The CBRT hiked rates by 425 basis points to 12 percent easing contagion fears over the runaway Turkish lira. The risk-on rally initially eased some JPY strength on haven demand, but the rally was short lived.
Unexpected SA hike
The South African Reserve Bank wrong footed many who had expected the central bank to increase its hawkish rhetoric, setting up for a later rate hike – the Rand has seen a trend of weakness, but not the kind of rapid declines seen in other EM currencies.
The central bank voted to raise interest rates by 50 basis points - up from 5 percent to 5.5 percent. The vote was not unanimous, with two board members voting to hold.
AUD/JPY reflects risk-off trading
A barometer of risk sentiment, AUD/JPY remains in a bearish trend, falling 1.47 percent on the day. The pair is currently trading at JPY89.60, falling from a high of JPY91.0902.
JPY has seen some selling yesterday after the Turkish central bank voted to kike rates in an effort to stave off further TRY weakness. However, TRY bearishness resumed today, increasing haven demand for the yen. The South African Reserve Bank then added to EM central bank activism with an unexpected rate hike.
Turkey remains in trouble
The CBRT hiked rates by 425 basis points to 12 percent easing contagion fears over the runaway Turkish lira. The risk-on rally initially eased some JPY strength on haven demand, but the rally was short lived.
Unexpected SA hike
The South African Reserve Bank wrong footed many who had expected the central bank to increase its hawkish rhetoric, setting up for a later rate hike – the Rand has seen a trend of weakness, but not the kind of rapid declines seen in other EM currencies.
The central bank voted to raise interest rates by 50 basis points - up from 5 percent to 5.5 percent. The vote was not unanimous, with two board members voting to hold.
AUD/JPY reflects risk-off trading
A barometer of risk sentiment, AUD/JPY remains in a bearish trend, falling 1.47 percent on the day. The pair is currently trading at JPY89.60, falling from a high of JPY91.0902.