ForexLive Asia Wrap: Japanese holiday doesn’t halt the Yen weakness

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  • Weekend Japan developments were centred on news that the BOJ was to accept the government’s 2% inflation target and to issue a joint statement to be finalized at the Jan 21 & 22 BOJ meeting; its not a binding accprd; there is no deadline for achieving the 2% target
  • New Zealand December Debit Credit Card Retail Spending +0.3%MoM (vs. +0.5% for November)
  • NZ December Debit Credit Card Total Spending +0.4% MoM (vs. +0.7% for November)
  • December Australia TD/MI Inflation Gauge +0.4%MoM (vs. -0.1% in November)
  • December ANZ Job Advertisements -3.8% MoM (vs. -2.9% for November), the ninth consecutive monthly decline
  • November Australia Housing Finance Loans came in at -0.5% (Market expected +0.5%)
  • The head of the Chicago Fed, Charles Evans, spoke in Hong Kong saying, notably: “need several months of 200k+ job growth to end QE3” and he “Expects low rates until 2015”
  • Le Figaro: France To Limit Cut In Livret A Yield To 1.75%
  • Financial Times: EU redrafts plan for bank rescue funding – calling into question the commitment to break the bank/sovereign nexus
  • Reports in the Australian Press that an Australian budget surplus this year is still a possibility because of the rise in the iron ore price

It was a holiday in Japan today, with markets less liquid than normal. That didn’t stop the Yen weakness, though – USD/JPY blasted through 89.50 in the morning. Getting as high as 89.67. It pulled back to 89.40 and then crawled back towards its highs for the balance of the session.

EUR/USD had a quiet start, but rallied as buyers seemingly reasoned that Bernanke’s speech due on Monday evening (Eastern Time) would dispel the doubts raised on easing by FOMC minutes released recently. EUR/USD got as high as 1.3404; EUR/JPY got to 120.

AUD/USD fell as low as 1.0522 in the morning but put on a decent rally to 1.0562 as the EUR and GBP/USD moved higher. NZD/USD, too, put on a good rally simultaneously.

Author: Eamonn Sheridan

Eamonn Sheridan worked with Bankers Trust Australia for 13 years as a Spot foreign exchange dealer, trading across all major currencies and all time zones. He rose to a Vice President position, running spot operations during the busy European time, leaving the bank just prior to it being sold to concentrate on running his own business in the ‘real world’! The markets, however, had him hooked – he continued to trade equities, CFDs and then on to futures, giving him broad experience across financial markets. He is now active in FX and equity index futures as well as writing for ForexLive™. Eamonn is a graduate of The University of Melbourne in Australia and lives in New South Wales.


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Eamonn Sheridan


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