GBP/JPY steadies near 212.00 as Yen recovery loses steam

GBP/JPY steadies near 212.00 as Yen recovery loses steam.
US Treasury Secretary Bessent denied any coordinated plan to support the Yen on Wednesday.
Later on Thursday, Tokyo CPI data might test the credibility of BoJ's tightening plans.

Guillermo Alcala FXStreet

The Pound holds right below weekly highs against the Japanese Yen, trading at 211.65 at the time of writing following Wednesday’s rebound from 210.00 lows. US Treasury Secretary Scott Bessent’s comments denying any plan to intervene in markets to support JPY stability, a rumour that triggered a sharp JPY recovery last week

Less than 24 hours after Trump praised the Greenback's depreciation, Bessent affirmed in a Wednesday Bloomberg interview that the US administration has a strong Dollar policy.

These comments offset the impact of the hawkishly tilted minutes of the latest Bank of Japan (BoJ) monetary policy meeting. The minutes showed general agreement that rising inflationary pressures, a weak Yen, and wage growth justify further monetary tightening.

Later on Thursday, the advanced Tokyo Consumer Price Index (CPI) will be closely watched to confirm those views. Consumer inflation in Japan’s capital eased to 2% year-on-year in December from 2.7% in November, and the market consensus for the core CPI suggests that price pressures might have moderated further in January, which could add negative pressure on the Yen.

In the UK, data released earlier this week revealed that shop price inflation jumped in January to its highest levels in nearly two years, boosted by rising food prices and the high cost of fuel. These figures boost expectations of a hot CPI reading in January and strengthen the case for steady BoE interest rates, providing some support to the Pound.

Economic Indicator

Tokyo Consumer Price Index (YoY)

The Tokyo Consumer Price Index (CPI), released by the Statistics Bureau of Japan on a monthly basis, measures the price fluctuation of goods and services purchased by households in the Tokyo region. The index is widely considered as a leading indicator of Japan’s overall CPI as it is published weeks before the nationwide reading. The YoY reading compares prices in the reference month to the same month a year earlier. Generally, a high reading is seen as bullish for the Japanese Yen (JPY), while a low reading is seen as bearish.

Economic Indicator

Tokyo CPI ex Fresh Food (YoY)

The Tokyo Consumer Price Index (CPI), released by the Statistics Bureau of Japan on a monthly basis, measures the price fluctuation of goods and services purchased by households in the Tokyo region excluding fresh food, whose prices often fluctuate depending on the weather. The index is widely considered as a leading indicator of Japan’s overall CPI as it is published weeks before the nationwide reading. The YoY reading compares prices in the reference month to the same month a year earlier. Generally, a high reading is seen as bullish for the Japanese Yen (JPY), while a low reading is seen as bearish.

GBP/USD flirts with 1.3500 as USD finds fresh demand

GBP/USD is flatlining near the 1.3500 level in Europe on Tuesday, facing some pressure from renewed US Dollar demand as a safe-haven amid surging Oil prices and inflationary concerns. The focus now remains on the Middle East headlines, with Wednesday's US CPI data the key event risk this week.

EUR/USD stays weak near 1.1550 amid US-Iran impasse

EUR/USD struggles to gain any meaningful traction and hovers near the 1.1550 area in the European session. Traders seem hesitant to place aggressive bets and opt to wait for further developments surrounding the Middle East crisis and this week's release of the latest US inflation figures.

Gold off two-month highs, back below $4,400 amid surging Oil prices

Gold retreats from its highest level since June 5 at $4,435, touched earlier this Tuesday, and slides back below the $4,400 mark in European trading. Surging Oil prices, amid the US-Iran impasse on talks to reopen the Strait of Hormuz, rekindled inflation concerns, lending support to the US DOllar at the expense of the non-yielding bullion.

Pi Network holds at key support as broader market declines

Pi Network steadies around $0.08745 after two consecutive days of losses, capped below the $0.1000 psychological threshold. Retail demand in PI derivatives remains firm, with Open Interest above $9 million, even as broader crypto market sentiment wanes. Technically, PI faces a steeper correction, as it lacks upside momentum to support a near-term recovery.

The inflation narrative is still way more important than the employment story

Core bonds sold off yesterday with the belly of the curve slightly underperforming in the US while European curves showed more of a bear flattening. Daily changes on the US curve varied between +4.7 bps (2-yr) and +6.4 bps (7-yr).

9-3: Is the Federal Reserve’s vote tally Warsh's new forward guidance?

The rate did not move. Neither did the statement, and that’s the more interesting fact. Set the July 29 Federal Open Market Committee (FOMC) statement beside the one issued on June 17, and the two documents are identical apart from a single verb and a paragraph at the bottom naming three dissenters.