Should we keep a close eye on the direction of the Swiss franc, which has fallen against the yen despite the CPI remaining flat?

Should we keep a close eye on the direction of the Swiss franc, which has fallen against the yen despite the CPI remaining flat?

05.06.2024

In the U.S. currency market yesterday, the U.S. dollar fell against the yen after the April U.S. manufacturing new orders report, released yesterday, showed a decline from 1.6% in the previous month to 0.7%. The USD/JPY pair fell by approximately 1.9 yen, from 156.482 to 154.534, marking its second consecutive day of decline.On the 4-hour chart, the pair has broken through the 20-day moving average (MA) and is extending its decline toward the 200-day simple moving average (SMA), while on the daily chart, it has not yet broken below the recent low. We will need to carefully assess whether the U.S. dollar will continue to weaken from here.

European currencies saw the Swiss franc weaken against the yen after Switzerland’s May Consumer Price Index (CPI), released yesterday, remained unchanged from the previous month at 1.4% year-on-year. The CHF/JPY pair fell from 174.737 to 173.201, breaking below the 75-period moving average (MA) on the hourly chart. On the 4-hour chart, it is barely holding above the 20-period MA, while on the daily chart, it continues to trade above the 10-period MA.

Today’s schedule includes South Korea’s real GDP at 8:00, Japan’s Monthly Labor Survey and total cash wages at 8:30, the Philippines’ Consumer Price Index at 10:00, Australia’s real GDP at 10:30, China’s Caixin PMI at 10:45, India’s Services PMI at 14:00, and France’sIndustrial Production, 4:55 PM Germany’s Services PMI, 5:00 PM Eurozone’s Services PMI, 6:00 PM Eurozone’sProducer Price Index, 9:15 PM US ADP Employment Report, 10:45 PM US PMI Purchasing Managers' Index, Canada BOC Policy Rate and Statement Release, 11:00 PM US ISM Non-Manufacturing Index, and 11:30 PM Canada BOC Governor Macklem Press Conference.Is the Swiss franc’s decline against the yen—which occurred despite no rise in CPI—merely a corrective pullback? We intend to carefully monitor the situation to determine the direction.