USD/JPY under pressure as Nikkei slides
City Index April 2, 2013 1:40 PM
<p>The JPY has been the highlight thus far this week as the market continues to unwind JPY short positions ahead of the new guards first […]</p>
The JPY has been the highlight thus far this week as the market continues to unwind JPY short positions ahead of the new guards first policy meeting at the BoJ this week with the direction of the JPY taken from the Nikkei which at one point had been down over 2.5%. The market ignored the ‘whatever it takes’ comment from the BoJ Governor overnight which regards to the 2% inflation to be achieved within two years with PM Abe quoted as saying that the BoJ could miss the 2% target if the global economy changes and that the Japanese central bank need to be accountable and that a steady aim for the inflation target is what is most important.
Risk has been trading with a general negative tone over the holiday period with the Tankan and Chinese PMI both below expectations but it was the US manufacturing ISM that really spooked the holiday markets yesterday with a reading of 51.3 versus an expected 54. The components of the report showed a brighter employment survey which will be encouraging for the NFP’s on Friday but new orders were way below expectations.
The RBA left rates on hold as expected. There had been some focus on the potential to remove their easing bias given the recent improvement in labor market but the statement remained the same “the inflation outlook, as assessed at present, would afford scope to ease policy further, should that be necessary to support demand”.
The data releases today consists of PMI data from Europe and the UK’s manufacturing sector along with mortgage approvals from the UK and US factory orders this afternoon. The USD is generally weaker across the board but I do note the 200-day moving average in EUR/USD at 1.2889 is yet to be broken.
Supports 1.2805-1.2770-1.2660 | Resistance 1.2889-1.2930-1.2960
Supports 92.50-92.00-91.30 | Resistance 93.80-94.30-95.00
Supports 1.5180-1.5100-1.5025 | Resistance 1.5280-1.5350-1.5400
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