- G7 countries take part in concerted intervention to weaken Japanese yen; Confirmation ECB, Bundesbank, Bank of England, Bangue de France, Bank of Italy all took part. Action mainly in EUR/JPY, but also reports Bank of England bought GBP/JPY
- Bank of Japan seen buying USD/JPY at 81.25 during European session
- Japan vice FinMin Igarashi: Satisfied with impact of G7 statement on forex, stock markets
- Japan life insurance association head: No need to sell foreign bonds to ensure ample funds in Japan – Kyodo
- France’s Lagarde: G7 intervention aimed at supporting Japan, halting yen’s rise
- New German economic govt advisor Feld: Expects ECB to raise rates before summer break
- Goldman Sachs: Goes long EUR/USD around 1.4085. Target 1.5000
- China’s central bank raises required reserve ratio by 50 bps
- Portugal PM: Says social democrats want to open political crisis out of opportunism
- German February PPI +0.7% m/m, +6.4% y/y, touch stronger than median forecasts +0.6%, +6.3% respectively
- Euro zone January trade balance -14.8 bln, weaker than median forecast -11.5 bln
Well it’s been a crazy old week, that’s for sure. Done wonders for our readership, but here’s hoping next week is just a little less hairy.
This morning we’ve seen concerted G7 intervention to weaken the Japanese yen. EUR/USD has been supported by buying of the EUR/JPY cross by an assortment of central banks (see above). We’re up at 1.4125 from early 1.4060, having been as high as 1.4135 so far.
Comments from the new German economic govt advisor regarding the need for interest rate hikes will have been noted, as will Goldman’s buy recommendation. The EUR/USD totally shrugged off China’s move to raise RRR by a further 50 bps and the political shannanigans in Portugal.
USD/JPY down at 81.40 from early 81.80. Did rally to 82.00 as European central banks came in selling yen, but then ran into a brickwall.
Market sources described the sell orders up at 82.00 as being “huge”
We subsequently sold-off, but the BOJ stepped in and drew a line in the sand at 81.25. So far it’s held.
Cable sits at 1.6145, effectively unchanged from when I arrived. Inbetween though we did see a swoon to a 1.6059 session low, the pairing not helped by strong early buying of the EUR/GBP cross. The cross sits up at .8745 from early .8705, having been as high as .8761.
Sources report an international emerging markets bank, with ties to South Africa, having been a very notable buyer of the cross this morning.
TGIF…………….
