Tag Archives: JPY

I had the privilege of being interviewed by Anthony Crudele, who is trader at the CME, for the Futures Radio Show.   There was much to discuss.  The FOMC met yesterday.  The market, judging from the Fed funds futures see little chance of a June hike.  Economists think otherwise.  The Bank of Japan surprised many by not changing policy earlier today.  The yen rallied.  It seems counter-intuitive.  The yen rallied when the BOJ surprised at the end of January when it the rate on some...

The Bank of Japan defied expectations and its economic assessment to  leave policy unchanged.  The inaction spurred a 3% rally in the yen and an even larger slump in stocks.  The financial sector took its the hardest and dropped almost 6%.  The yen's surge helped underpin other Asian currencies, especially the South Korean won, which gained nearly 1%. At the end of January, the BOJ surprised by adopting negative interest rates for a small part of Japanese banks' excess reserves.  The yen...

Under Kuroda’s leadership the BOJ has surprised the market a number of times, most recently with the move to negative rates at the end of January.   It is not that such a move, which has been tried by several European central banks, was without merit.  After all, growth and inflation prospects are not very encouraging.  The Bank of Japan’s one mandate, to raise inflation pressures, has remains as elusive as ever.  The BOJ has already pushed out the time that the inflation target will be...

The US dollar starts what promises to be an eventful week giving back some the gains score in second half of last week against the euro and yen.    Equity markets are extending their pre-weekend losses.   Commodities are also trading with a heavier bias.  Markets in Australia, New Zealand, and Italy are closed for national holidays. The consolidative tone may not be very surprising give the data to be released in the coming days and the FOMC and BOJ meetings.  Investors will see the first...

(here is a draft of my monthly column for a Chinese paper) The US dollar has had a rough few months.  It has fallen against most major and emerging market currencies this year.  A critical issue for global investors and policymakers is whether the dollar’s uptrend is over, or is this just a respite.  Much is at stake with the answer. The variability of exchange rates could account for a third of the total return of a basket of international equities and twice as much for a basket of...

Equity markets are seeing this week's gains trimmed after the S&P 500 fell 0.5% yesterday, recording its biggest loss in two weeks.  Disappointing earnings in some tech leaders spurred profit-taking, The US 10-year Treasuries are consolidating the week's nine basis point increase in yields after nearing 1.90% yesterday.  Asian bonds yields tracked US Treasury yields higher while European bonds are narrowly mixed as they consolidate yesterday's increase.   The US dollar recovered from...

The following observations are drawn from the weekly report of Japan’s Ministry of Finance unless noted otherwise.  We use the weekly data instead of monthly to identify changes of trend earlier.  We use simple convention of the week by the last rather than the first day. That means that the report for the week ending April 1 is the first week of April.  To smooth out the volatility, we will often refer to a four-week average. The latest MOF report was released earlier today.   1....

The ECB meeting is the session’s highlight.  In recognition of the risk that ECB President Draghi expresses displeasure with the premature tightening of financial conditions through the exchange rate channel is encouraged a modest bout of euro selling.  The single currency has drifted back toward the lows seen at the start of the week near $1.1275.   The euro has held above last week’s lows, which were set April 14 near $1.1235.  A retracement target of the euro’s gains since March 10 ECB...

The US dollar has been largely confined to yesterday’s ranges against the major currencies. China’s yuan slipped lower for the first time in four sessions, while the Shanghai Composite fell 2.3%, the most since the end of February.   While a few equity markets in Asia managed to follow suit after US equity market gains carried the S&P 500 above 2100 since last November, small gains in Tokyo (0.2%), Australia (0.5%) were sufficient to keep the MSCI Asia-Pacific Index flat.  European...

The US dollar has been largely confined to yesterday’s ranges against the major currencies. China’s yuan slipped lower for the first time in four sessions, while the Shanghai Composite fell 2.3%, the most since the end of February.   While a few equity markets in Asia managed to follow suit after US equity market gains carried the S&P 500 above 2100 since last November, small gains in Tokyo (0.2%), Australia (0.5%) were sufficient to keep the MSCI Asia-Pacific Index flat.  European...