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Forex Flash: Japan bond market showing rising inflation expectations - RBS

FXstreet.com (Barcelona) - “The Japanese bond market has been quite volatile since the BoJ policy announcement,” says Greg Gibbs FX Trading Strategist at RBS. “Despite the very aggressive purchases planned by the BoJ across the curve that will essentially absorb net new issuance by the government over the next two years, and potentially until the BoJ makes its 2% inflation target, yields have rebounded significantly in recent sessions,” the analyst notes.

“This suggests that JGB investors are seeing the inflationary consequences of the BoJ policy and are reticent of buying JGBs,” Greg suggests, adding: “It may indicate that Japanese investors will look increasingly to foreign bond markets, crowded out by the BoJ. It is not surprising then that the JPY remains weak and JPY crosses are rising further,” he concludes.

Forex: AUD/JPY pushes again above 104 highs post China trade deficit

Following just published Chinese trade deficit of -0.88B, which came in the back of higher imports than exports, which benefits Australian economy, AUD/USD has spiked higher breaking above the 1.05 handle, thus pushing AUD/JPY cross higher as well on Aussie strength to fresh session highs above 104.20.
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Forex Flash: USD to trade more robustly against KRW, PHP and SGD – ANZ

According to Richard Yetsenga & Khoon Goh, analysts at ANZ Research: “The US dollar is likely to trade more robustly against currencies where competitive pressure from Japan or policymaker resistance are likely to be greatest,” the team says, “or where the risk of a reallocation of global equity capital toward Japan is prevalent.”
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