Yen Rallies Post-BOJ And UK Retail Sales

Yen Rallies Post-BOJ And UK Retail Sales

London Capital Group  | Sep 18, 2020 07:07

Stock markets tip lower after conflicting messages on when a vaccine will become available.

The Japanese yen has popped to a 6-week high after the BOJ lifted economic forecasts and Yoshihide Suga took over as Prime Minister

MARKETS

US stocks fell in volatile trading on Thursday amid renewed pressure in shares of major tech companies. Conflicting messaging on the coronavirus vaccine front and uncertainty around further stimulus also weighed on sentiment.

European equities fell around half a percent. Gold declined nearly 1% while oil prices increased for the second day in a row. Asian stocks inched up this morning.

DAY AHEAD

For this day ahead I'm watching the dollar-yen exchange rate which dropped below the 105 level – there is also UK and Canadian retail sales reported today.

So the Federal Reserve and Bank of Japan both just kept interest rates steady in meetings this week and both raised their economic forecasts for 2020 for the US and Japan respectively. So not much to tell between the two – yet we are now sub 105 again in dollar-yen (USD/JPY) for the first time in six weeks. With little to separate the two on monetary policy, traders seem to be favouring the yen.

Why, well if you pull out to a 10-year timeframe on the chart you can see the impact Japan’s QQE program had on the value of the yen. Now the Fed has zero rates and is promising to keep them there for at least three years. So I think it’s time to ask the question why the yen still deserves such a historically weak value.

As far as events for today, there is little of interest on the earnings front but we do have retail sales from the UK and Canada. The pound had a wobble after the BOE said it was again looking into negative interest rates (again!) at its rate-setting meeting yesterday. Let’s see if retail sales can tip Sterling over the edge. The forecast is for 0.7% monthly gains, down from 3.6%.

In Canada, retail sales are forecast to have grown 1% in July, normalising from a 24% gain in June.

Original Post

London Capital Group

Latest comments

Add a Comment
Please wait a minute before you try to comment again.
Discussion
Write a reply...
Please wait a minute before you try to comment again.

Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.

English (USA) English (India) English (Canada) English (Australia) English (South Africa) English (Philippines) English (Nigeria) Deutsch Español (España) Español (México) Français Italiano Nederlands Português (Portugal) Polski Português (Brasil) Русский Türkçe ‏العربية‏ Ελληνικά Svenska Suomi עברית 日本語 한국어 简体中文 繁體中文 Bahasa Indonesia Bahasa Melayu ไทย Tiếng Việt हिंदी
Sign out
Are you sure you want to sign out?
NoYes
CancelYes
Saving Changes

+

Download the Investing.com App

Get free real time quotes, charts and alerts on stocks, indices, currencies, commodities and bonds. Get free top of the line technical analysis/predictors.

Investing.com is better on the App!

More content, faster quotes and charts, and a smoother experience is available only on the App.

';