USD/JPY & GBP/USD & USD/RUB
Over the weekend, the results of Japan’s snap election were announced with PM Abe securing over 66% of the Lower House in a landslide victory. This led to a 100 pip swing in USD/JPY after initially breaking above 119.00 before tumbling down to 117.78 led by carry-trade unwinds and semi-official price keeping operations. In the European session, USD/JPY has fluctuated between gains and losses trading in modest negative territory in a rather subdued session. The pair was bid at the EUREX open supported by higher yields of UST’s strengthening the greenback. However, the USD pulled off following the US Empire Manufacturing -3.60 vs. Exp. 12.40 (Prev. 10.16) which was negative for the first time since early 2013 and superseded the positive US Industrial Production whose manufacturing component showed its largest rise since February 2014.GBP/USD has experienced a bout of selling pressure throughout the session is likely to be placed on the upcoming inflation report tomorrow which is expected to reveal a slip in the Y/Y to 1.3% to 1.2%, thus presenting further weight to the argument that inflation could slip below 1.0%.
Elsewhere, the RUB continued its ongoing decline by printing record lows against the USD by breaking above 60.00 however, RANsquawk sources reporting that the Russian Central Bank is intervening by selling USD 350mln in order to lift the RUB. In turn, USD/RUB later came off its highest levels to trade back below the 60.00 handle.
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