JPY: BoJ Governor Ueda signals further rate hikes – MUFG

FXStreet Insights Team FXStreet

Bank of Japan (BoJ) Governor Kazuo Ueda opened the year reiterating a hawkish stance, emphasizing continued rate hikes to support stable inflation and economic growth. With USD/JPY consolidating near recent highs and long-end JGBs under pressure, the government may intervene in FX markets to stabilize the yen if upward momentum resumes, MUFG's FX analyst Lee Hardman reports.

USD/JPY consolidates between 155 and 158

"The hawkish repricing of BoJ rate hike expectations was encouraged by comments from Governor Ueda overnight. He used his first public appearance this year to reiterate that 'we will keep raising rates in line with the improvement in the economy and inflation' adding that 'the appropriate adjustment of monetary easing will lead to the achievement of stable inflation target and longer-term economic growth'. He expects the 'mechanism between moderate wage growth and inflation is likely to maintained'."

"The weak yen will keep pressure on both the BoJ to hike rates sooner, and the government to consider intervening directly in the FX market to provide support for the yen. One positive for Japan has been that USD/JPY has been consolidating at higher levels between 155.00 and 158.00 over the last couple of months."

"The risk of intervention would step up if USD/JPY regains upward momentum and retests last year’s highs at 158.87. The sell-off at the long-end of the JGB curve also highlights that the government needs to take action to restore confidence in their commitment to fiscal discipline which would help ease yen selling pressure as well."

Author

FXStreet Insights Team

FXStreet

The FXStreet Insights Team is a group of journalists that handpicks selected market observations published by renowned experts. The content includes notes by commercial as well as additional insights by internal and external analysts.

GBP/USD clings to multi-day peaks below 1.3500

GBP/USD trades with marked gains on Friday, now giving away some gains following an earlier surpass of the key 1.3500 yardstick. Indeed, Cable gathers fresh steam amid the strong offered stance in the Greenback, all after US NFP badly missed expectations in July.

EUR/USD: Post-NFP bounce falters around 1.1580

EUR/USD reverses Thursday’s decline and trades with solid gains in the 1.1560 region, or two-month peaks, on Friday. The pair’s firm performance comes in a context of a sharp correction in the US Dollar as investors continue to assess disheartening US NFP readings.

How Wall Street rigs the game [Video]

In this week’s Live from the Vault, Andrew Maguire is joined by Peter Antico and Sean Stone to discuss the Paradigm of Money - an in-depth expose of financial market corruption, from naked shorting to the two-tier system that protects Wall Street.

XRP Price Forecast: XRP nears critical $1.00 support

Ripple (XRP) remains pressured on Friday, trading around $1.03 at the time of writing. The token appears to hold this current level as support but lacks a catalyst to sustain a knee-jerk rebound toward the next key resistance at $1.10.

Is Gold about to enter its biggest bull run since 2020?

Gold has stormed back into the spotlight and its next move could leave late buyers chasing. On August 5, the yellow metal surged almost 7% – roughly $174 – to close near $4,308 an ounce, posting one of its biggest daily advances in recent history. A weaker U.S dollar, falling Treasury yields, changing Federal Reserve expectations and renewed safe-haven demand all struck at once.

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.