Should we be wary of the ongoing yen depreciation, which shows no signs of slowing despite declines in global PMIs?
26.06.2023
- Remarks by Dingra, MPC Member (UK)
- U.S. 2-Year Treasury Auction
Last weekend, the U.S. dollar rose against the yen despite the fact that the U.S. PMI (Purchasing Managers' Index) figures released on the 23rd fell below the previous readings for both the manufacturing and services sectors.The USD/JPY pair rose from 142.675 to 143.862. The 142.xx level, which had been seen as resistance, turned into support, providing momentum for the upward move. However, during today’s Asian session, the USD/JPY pair has been trading in the mid-143s without a clear direction. We will wait and see cautiously to see if trading activity picks up during the U.S. session.
Despite the fact that the preliminary UK PMI figures released last weekend on the 23rd fell below the previous readings for both the manufacturing and services sectors, the pound rose against the yen. Although GBP/JPY fell immediately after the PMI release, it regained momentum during U.S. trading hours, rising from 181.278 to 182.926 and hitting a new high for the year.During today’s Asian session, GBP/JPY has been trading in a manner that suggests it is attempting to rise despite opening with a gap of approximately 40 pips. It will be worth watching whether the pound continues to gain ground during the European session.
Today’s schedule includes Taiwan’s Industrial Production at 5:00 PM, Germany’s IFO Business Climate Index, remarks by UK MPC member Dingra at 5:15 PM, remarks by SNB Governor Jordan at 5:50 PM, and the UK’sCBI Retail Trade Survey, at 9:00 PM the Mexican Economic Activity Index, at 11:25 PM remarks by SNB Board Member Mecler of Switzerland, at 11:30 PM the Dallas Fed Manufacturing Activity Index, at 12:30 AM the U.S. 6-month bill auction, at 2:00 AM the U.S. 2-year Treasury note auction, and at 2:30 AM remarks by ECB President Lagarde.We must remain highly vigilant regarding the ongoing yen depreciation trend, which continues undeterred by declines in various countries’ PMIs.
Author: Keisuke Sakurai
