Yen strength and upbeat comments from Kuroda - Scotiabank

Ross J Burland FXStreet

Analysts at Scotiabank noted the yen's strength on the back of relatively upbeat comments from BoJ Gov. Kuroda.

Key Quotes:

"The current policy stance was deemed appropriate, however, market participants were likely caught off guard by the Governor’s comments on policy normalization discussing the prospect of an exit from QQE and yield curve control."

"JPY appears somewhat weak relative to levels implied by interest rate differentials at both the short and longer-end of the curve, with ongoing pressure from the broader tone of risk appetite."

"Levels of implied JPY volatility are low, however, risk reversals are suggestive of a creeping rise in the premium for protection against JPY strength."

Author

Ross J Burland

FXStreet

Ross J Burland, born in England, UK, is a sportsman at heart. He played Rugby and Judo for his county, Kent and the South East of England Rugby team.

Markets move fast. We move first.

Orange Juice Newsletter brings you expert driven insights - not headlines. Every day on your inbox.

Editor's Picks

EUR/USD drops to daily lows near 1.1630

EUR/USD now loses some traction and slips back to the area of daily lows around 1.1630 on the back of a mild bounce in the US Dollar. Fresh US data, including the September PCE inflation numbers and the latest read on December consumer sentiment, didn’t really move the needle, so the pair is still on course to finish the week with a respectable gain.

GBP/USD trims gains, recedes toward 1.3320

GBP/USD is struggling to keep its daily advance, coming under fresh pressure and retreating to the 1.3320 zone following a mild bullish attempt in the Greenback. Even though US consumer sentiment surprised to the upside, the US Dollar isn’t getting much love, as traders are far more interested in what the Fed will say next week.

Gold makes a U-turn, back to $4,200

Gold is now losing the grip and receding to the key $4,200 region per troy ounce following some signs of life in the Greenback and a marked bounce in US Treasury yields across the board. The positive outlook for the precious metal, however, remains underpinned by steady bets for extra easing by the Fed.