- USD/JPYbears take control and bust down below the 200-hour MA.
- It was Brexit stealing the show overnight, weighing on US yields and risk.
USD/JPY has been grinding slightly lower from 108.60 to 108.45 prior to the open in Tokyo but there has been a burst of energy from the bears with Yen picking up a bid across the board. USD/JPY is currently trading down -0.13% at the time of writing having travelled from a high of 108.51 to a low of 108.25.
From a fundamental basis, it was Brexit stealing the show once again overnight and trade-war and Middle East war headlines were taking a backseat to the commotion in the UK Parliament.
"The quick take is that PM Johnson’s bill won parliamentary support in principle but the government’s timetable of just 3 days debate on the bill was rejected. Johnson will now meet once more with EU leaders to discuss the timetable and an early election is increasingly likely, but with Brexit delayed beyond the election. Key for markets is that a no-deal Brexit remains unlikely," analysts at Westpac explained.
In the aftermath of all of that, EU's Tusk announced that he will recommend the EU accept a UK request for an extension out to January 31 2020. While a no-deal Brexit remains unlikely, UK politics, is as ever, up in the air and likely to keep risk at bay. However, on evidence compounds that a no deal Brexit is off the table, a relief in markets should be seen through a rally in the Pound and a softer Yen.
US data and US yields in focus
As for data overnight, in the US, the Oct Richmond Fed manufacturing survey rose firmly to +8 (est. -7, prior -9). "Gains were broad-based with noted lifts in employment and new orders with expectations edging higher in addition to stronger current conditions. US Sep existing home sales slid -2.2%m/m (est. -0.7%m/m). However, at 5.38mn (est. 5.45mn) the annualised level remains close to post record highs and NAR’s chief economist continues to cite a shortage of stock/supply," the analysts at Westpac explained.
US 2-year Treasury yields were moving between 1.59% and 1.63 while the 10-year yield travelled between 1.76% and 1.80%. "Markets are pricing 22bp of easing at the 30 October meeting and a terminal rate of 1.24% (vs 1.88% currently)," the analysts at Westpac noted.
USD/JPY levels
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.
The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.
Recommended content
Editors’ Picks
AUD/USD posts gain, yet dive below 0.6500 amid Aussie CPI, ahead of US GDP
The Aussie Dollar finished Wednesday’s session with decent gains of 0.15% against the US Dollar, yet it retreated from weekly highs of 0.6529, which it hit after a hotter-than-expected inflation report. As the Asian session begins, the AUD/USD trades around 0.6495.
USD/JPY finds its highest bids since 1990, approaches 156.00
USD/JPY broke into its highest chart territory since June of 1990 on Wednesday, peaking near 155.40 for the first time in 34 years as the Japanese Yen continues to tumble across the broad FX market.
Gold stays firm amid higher US yields as traders await US GDP data
Gold recovers from recent losses, buoyed by market interest despite a stronger US Dollar and higher US Treasury yields. De-escalation of Middle East tensions contributed to increased market stability, denting the appetite for Gold buying.
Ethereum suffers slight pullback, Hong Kong spot ETH ETFs to begin trading on April 30
Ethereum suffered a brief decline on Wednesday afternoon despite increased accumulation from whales. This follows Ethereum restaking protocol Renzo restaked ETH crashing from its 1:1 peg with ETH and increased activities surrounding spot Ethereum ETFs.
Dow Jones Industrial Average hesitates on Wednesday as markets wait for key US data
The DJIA stumbled on Wednesday, falling from recent highs near 38,550.00 as investors ease off of Tuesday’s risk appetite. The index recovered as US data continues to vex financial markets that remain overwhelmingly focused on rate cuts from the US Fed.