EUR/JPY tests support at 182.00 with Yen intervention risks looming

EUR/JPY depreciates for the second consecutive day and hits levels below 182.00.
January's German IFO Business Climate Index shows a stalled market sentiment.
The Yen remains firm amid speculation of a joint US-Japan intervention.

Guillermo Alcala FXStreet

The EUR/JPY depreciated for the second consecutive day on Monday, with the JPY boosted amid investor concerns about an imminent Yen intervention. The pair is trading at 182.25 at the time of writing, after hitting a five-week low of 181.91 earlier in the day.

The Yen has been the best performer among the G8 currencies over the last two trading days, following a report by Reuters, stating that the US Federal Reserve (Fed) had been conducting US Dollar-Yen rate checks with major US banks on Friday. The news, which boosted speculation about a joint US-Japan FX intervention, sent the Yen surging across the board.

Earlier on Monday, Japan’s Prime Minister, Sanae Takaichi, reiterated Tokyo authorities’ commitment to act against speculative market movements in a TV interview, another intervention warning, providing additional support to the Yen.

In the Eurozone, German IFO Business Climate Figures have failed to provide any significant support to the Euro. Business sentiment has remained steady at 87.6 in January, against expectations of a slight improvement to 88.1. The sentiment about the current economic situation barely improved, to 85.7 from 85.6 in the previous month, and the Expectations Index deteriorated moderately, to 89.5 from 89.7 in December.

On Friday, preliminary PMI figures released on Friday showed mixed readings, with the manufacturing sector improving beyond expectations, although still at contraction levels, and the services sector’s activity expanding, yet at a slower-than-expected pace.

Economic Indicator

IFO – Business Climate

This German business sentiment index released by the CESifo Group is closely watched as an early indicator of current conditions and business expectations in Germany. The Institute surveys more than 7,000 enterprises on their assessment of the business situation and their short-term planning. The positive economic growth anticipates bullish movements for the EUR, while a low reading is seen as negative (or bearish).

AUD/USD sticks to positive bias above 0.7100; lacks bullish conviction

AUD/USD trades with a positive bias for the second straight day, holding above 0.7100 in the Asian session on Friday as softer US bond yields keep US Dollar bulls on the back foot. Furthermore, hawkish RBA Governor Bullock's comments boost rate hike bets and support the Aussie. However, the Fed's hawkish outlook, along with geopolitical uncertainties, limits USD losses and caps the pair.

USD/JPY approaches 158.00 as Japanese Yen resumes decline

USD/JPY is resuming its upside in the European session on Friday, refreshing two-week highs and nearing 158.00. The Japanese Yen extends losses, despite the Bank of Japan's (BoJ) expected rate hike to 1.25% and hawkish Governor Ueda's comments, as two surprise dissents against the rate hike weigh on it.

Gold keeps the bid tone in place; still below $4,400

Gold adds to the optimism seen in the second half of the week, trading with decent gains just below the $4,400 mark per troy ounce on Friday. The precious metal’s advance finds traction in declining crude oil prices and fresh selling pressure on the US Dollar.

Why altcoin season isn't coming back — and what stole its capital

If, after two years of being frozen in ice, Katara and Sokka woke you up to the crypto market, it would seem like 100 years have passed. With Bitcoin soaring to record highs just over a year ago, everyone expected a routine altcoin season, where investors take profits from the top crypto to chase higher returns in altcoins.

BoJ Recap: Not as hawkish as expected

The BoJ raised its short-term interest-rate target to 1.25% from 1.00% in a 7-2 vote, marking another step in the normalisation of monetary policy and widely matching what everyone has been expecting for weeks. Governor Kazuo Ueda said the policy phase had changed.

BoJ Recap: Not as hawkish as expected

The Bank of Japan (BoJ) raised its short-term interest-rate target to 1.25% from 1.00% in a 7-2 vote, marking another step in the normalisation of monetary policy and widely matching what everyone has been expecting for weeks.