Caution is advised regarding the downside potential of GBP/JPY, which is falling amid a strong yen
21.12.2023
- Philadelphia Fed Business Outlook Index
- CBI Distribution Transaction Survey
In the U.S. currency market yesterday, the U.S. dollar fell slightly against the yen after the MBA Mortgage Applications Index, released yesterday, deteriorated to -1.5% from 7.4% the previous week. The USD/JPY pair fell slightly from 144.084 to 143.250. The USD/JPY pair has continued to decline during today’s Asian trading session, already falling to 142.795.As Europe and the U.S. will be in Christmas mode from the weekend through the beginning of next week, traders should remain cautious regarding price movements ahead of the long holiday break.
European currencies saw the pound fall sharply against the yen after the UK’s November Consumer Price Index, released yesterday, showed core inflation on a year-over-year basis falling to 5.1% from 5.7% the previous month. The GBP/JPY pair dropped by about 2 yen, from 183.332 to 181.265.The decline occurred as the price touched the 20-day moving average on the daily chart. The yen has continued to strengthen during today’s Asian trading session, with the price falling to 180.461. We will monitor the situation closely to see if the pound continues to weaken as the yen strengthens further.
Today’s schedule includes Hong Kong’s current account balance at 5:30 p.m., the UK’s CBI Retail Trade Survey at 8:00 p.m., the TCMB policy rate and statement from Turkey, and Canada’s retail sales at 10:30 p.m.,U.S. Initial Jobless Claims, U.S. Q3 GDP, U.S. Personal Consumption Expenditures, U.S. Philadelphia Fed Business Outlook Index at 10:00 PM, U.S. Leading Economic Index at 12:00 AM, U.S. Weekly Natural Gas Inventories at 12:30 AM, and the U.S. Kansas City Fed Manufacturing Activity Index at 1:00 AM.We must remain highly vigilant regarding the downside potential of GBP/JPY, which is declining amid a strengthening yen.
Author: Keisuke Sakurai
