US equity futures are fueling the yen trade further

Author: Justin Low | Category: News

USD/JPY touches a session low of 107.43, as dollar weakness continues into the day


And by the looks of it, equities are not going to provide any form of comfort for the BOJ. S&P 500 futures continue to trade near the lows, down 0.6%. Meanwhile, the Dow and Nasdaq futures are also down by 0.7% and 0.5% respectively.

We've already seen comments here by Japan's currency chief, but it's not really going to do much to stop the yen from advancing on the day if US equities turn sour as well.

The dollar weakness today isn't helping either, as EUR/USD and GBP/USD hit session highs of 1.2345 and 1.3924 moments ago too, with USD/CHF down to lows of 0.9330 on the day. It is a bout of risk aversion, but as I said, it's the breakdown in USD/JPY that's making up for most of the risk aversion today (self fulfilling risk aversion trade).

European equities are lower, but it's no rout or anything close to it. Eurostoxx is down 0.59%, Germany's DAX is down by 0.34%, and UK's FTSE is down by 0.06%. It's not that bad in equities yet to be fair.

Anyway, the next BOJ governor is going to have an unenviable job in managing monetary policy and market conditions such as these.

"Is it safe to open my eyes now?"

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