Volatility in the Nikkei drags the JPY lower
City Index May 24, 2013 2:02 PM
<p>USD/JPY took centre stage in the FX space again overnight, trading another 150-point range as the pair follow the volatile Nikkei. The Japanese stock market […]</p>
USD/JPY took centre stage in the FX space again overnight, trading another 150-point range as the pair follow the volatile Nikkei. The Japanese stock market had initially seen gains of 3% but as fresh selling emerged the gains were eroded, with the Nikkei 225 then falling over 4% below 14,000. The below illustrates how the JPY was dragged around by this volatility.
The JPY initially traded above 102.50 but as the Nikkei collapsed the pair traded in quick fashion to a low of 101.09. This continuous volatility inevitably brought out the Japanese officials.
Japanese PM Abe said that it’s better not to comment on market trends and that they are closely watching the stock market’s movements.
BoJ Governor Kuroda, meanwhile, said it’s extremely important to ensure JGB market stability; they don’t have specific targets for stock prices and forex and will not comment on day-to-day moves. Will continue to strengthen communication with the markets.
This morning’s data highlight will be the German IFO survey, with UK mortgage lending released 30 minutes later. The US session brings to us the volatile durable goods data.
Supports 1.2900-1.2825-1.2745 | Resistance 1.2970-1.3005-1.3030
Supports 100.80-100.20-100.00 | Resistance 102.80-103.30-103.80
Supports 1.5065-1.5015-1.5000 | Resistance 1.5125-1.5165-1.5220