Daily Digest Market Movers: Japanese Yen extends gains due to intervention threat 에서

26 Jun 2024, 20:37 · Views 137

According to the CME FedWatch Tool, investors are pricing in 67.7% odds of a Fed rate cut in September, compared to 61.5% a week earlier.
According to a Reuters report, Japanese Chief Cabinet Secretary Yoshimasa Hayashi stated on Tuesday that authorities would respond appropriately to excessive currency volatility. This fresh warning comes as the Japanese Yen has approached the key 160 per US Dollar level.
As long as the USD/JPY pair remains above 159.30, it could rise above 160.00, potentially reaching another resistance level at 160.25, UOB Group analysts note.
Japan's top currency diplomat, Masato Kanda, stated on Monday that he would take appropriate measures if there were excessive movements in the foreign exchange market. Kanda cautioned against the negative economic effects of such movements and emphasized his readiness to intervene around the clock if necessary, per Reuters.
On Monday, minutes of the Bank of Japan's last meeting showed that Japanese policymakers discussed a near-term interest rate hike. According to a Reuters report, one member advocated for an increase "without too much delay" to help bring inflation back down.
Strong US business activity data from Friday dampened expectations for Federal Reserve (Fed) interest rate cuts. US Composite PMI for June surpassed expectations, rising to 54.6 from May’s reading of 54.5. This figure marked the highest level since April 2022. The Manufacturing PMI increased to a reading of 51.7 from a 51.3 figure, exceeding the forecast of 51.0. Similarly, the Services PMI rose to 55.1 from 54.8 in May, beating the consensus estimate of 53.7.
Reuters reported that Bank of Japan Deputy Governor Shinichi Uchida stated on Friday that the central bank would "adjust the degree of monetary support" if the economy and prices align with its forecasts. This signals the bank's readiness to raise interest rates further.
Japan reaffirmed its commitment on Friday to achieve a primary budget surplus by the next fiscal year. This decision reflects concerns that exiting the ultra-low interest rate environment could increase the government's debt burden, according to Reuters.

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