Caution over risk-off yen-buying trends

Caution over risk-off yen-buying trends

21.01.2022

Yesterday, the three major U.S. stock indices all extended their losses toward the close, creating a risk-off sentiment characterized by falling stock prices, lower interest rates, and declining oil prices. The VIX (fear index) rose by about 7% from the previous day to 25.5, largely reflecting the impact of the stock market decline. However, the Philadelphia Fed Manufacturing Index released yesterday came in at 23.2, beating the market forecast of 19.0.

In the foreign exchange market, the yen has emerged as the strongest currency during today’s Asian trading session, with GBP/JPY falling more than 130 pips from 156.04 to 154.70. Technically, GBP/JPY has broken well below the 20-day moving average on the daily chart and is continuing its decline while forming a double top. Therefore, if the yen-buying trend persists, we should anticipate a break below the 150-yen level.

Today’s schedule includes UK retail sales and the Turkish consumer confidence index at 4:00 PM European time, followed by remarks from ECB President Lagarde at 9:30 PM. During US trading hours, remarks from a member of the Bank of England’s Monetary Policy Committee are scheduled for 10:00 PM, followed by Canadian retail sales at 10:30 PM and the US Leading Economic Index at midnight. We’ll be closely monitoring the situation to see if the foreign exchange market experiences significant volatility heading into the weekend.

Past Market Reports

1. 20.04.2026New

   With the euro-Australian dollar pair hitting new lows this month, attention is turning to how much further it might fall

2. 17.04.2026New

   Will the market wait and see how much further the U.S. dollar can rise against the yen?

3. 16.04.2026New

   Will the weakening Swiss franc recover? Attention is turning to price movements during European trading hours.

4. 15.04.2026New

   Market participants are likely keeping a close eye on the upside potential of the euro, which has risen against the U.S. dollar

5. 14.04.2026New

   Should we keep an eye on remarks by key figures in the U.S. and try to gauge the direction of currency strength?

6. 13.04.2026

   Market participants are likely watching for signs of a rebound in the Canadian dollar, which fell against the U.S. dollar following the release of employment figures

7. 10.04.2026

   Will the weakening Swiss franc continue to strengthen against the yen, or should we wait and see?

8. 09.04.2026

   Will the U.S. dollar, which has fallen against the yen, continue its downward slide, or should we wait and see how the market moves?

9. 08.04.2026

   Should we keep an eye on the upside for European currencies that have risen against the U.S. dollar?

10. 07.04.2026

    Market participants may be wary of further downside potential for the U.S. dollar, which has weakened amid concerns over the situation in Iran