Yen gains on reports of possible BOJ hike to 0.25%
Updates to 1515 EDT
By Karen Brettell
July 30 (Reuters) -The Japanese yen gained on Tuesday on news reports that the Bank of Japan is considering raising rates to 0.25% when it concludes its two-day meeting on Wednesday.
That would be an increase from the current 0-0.1% and more than the market is currently pricing in, with a 10 basis-point increase still seen as only a 55% probability. 0#BOJWATCH
The Japanese central bank will also detail plans to taper its huge bond buying as it steadily unwinds a decade of massive monetary stimulus.
"We've seen quite a move in the yen on the day," said Shaun Osborne, chief foreign exchange strategist at Scotiabank in Toronto. "Some people were thinking that this move had probably already played out, but I think there's still the potential for some of these carry trades and some of the positioning to unwind a little bit further."
The dollar was last down 0.47% at 153.29 yen JPY=EBS. The dollar has fallen against the Japanese currency since hitting a 38-year high of 161.96 on July 3.
Osborne sees the yen having a fair value of around 145 against the dollar, saying that "there's a way to go before the short yen trade is fully cleaned out and maybe even reversed."
The greenback has lost around 4.7% against the Japanese currency this month.
The yen had weakened earlier on Tuesday as investors closed positions before Wednesday's interest rate decision.
“We've obviously had a very big move in the month of July,” said Brad Bechtel, global head of FX at Jefferies in New York.
Bechtel sees further yen gains as likely temporary, with the currency expected to continue to suffer from the wide differential between U.S. and Japanese interest rates.
“The yen is going to ultimately resolve weaker over time. It's just a question of how long that time period is,” Bechtel said. “There's no point in being long the yen because nobody wants to pay carry when they can earn carry in a myriad of other ways in the FX market.”
The dollar fell 0.03% to 104.55 against a basket of currencies =USD, after earlier hitting 104.79, the highest level since July 11.
The Federal Reserve on Wednesday is expected to hold rates steady, but possibly give stronger clues that it is closer to rate reductions.
Traders see a rate cut in September as certain and are also pricing in a second and possibly third cut by year-end. FEDWATCH
The U.S. central bank is wary of hinting at cuts too soon in case inflation rebounds, however, which may make a signal more likely at the U.S. central bank’s economic symposium in Jackson Hole, Wyoming, next month.
U.S. data on Tuesday showed that U.S. job openings fell modestly in June and data for the prior month was revised higher. Consumers' perceptions of the labor market, meanwhile, are deteriorating.
The euro EUR=EBS fell 0.06% to $1.0812 and earlier reached $1.0798, the lowest level since July 8.
The euro zone's economy grew slightly more than expected in the three months to June, though a mixed underlying picture and a string of pessimistic surveys cloud the outlook for the rest of the year.
The German economy unexpectedly contracted in the second quarter after skirting a recession at the beginning of the year and July's inflation rose.
Sterling GBP=D3 weakened 0.2% to $1.2833 before the Bank of England's Thursday meeting. Market pricing sees it as roughly a coin toss whether the BoE cuts rates.
In cryptocurrencies, bitcoin BTC= fell 2.64% to $65,586.
JOLTS https://reut.rs/46I0Rwt
Reporting by Karen Brettell; Additional reporting by Sruthi Shankar and Alun John; Editing by Sharon Singleton and Matthew Lewis
Gerelateerde activa
Laatste nieuws
Disclaimer: De entiteiten van de XM Group bieden diensten en toegang tot ons online handelsplatform op basis van uitsluitend-uitvoering, waardoor een persoon de beschikbare content op of via de website kan bekijken en/of gebruiken, zonder dat dit is bedoeld voor wijziging of uitbreiding. Dergelijk(e) toegang en gebruik vallen onder: (i) de algemene voorwaarden; (ii) risicowaarschuwingen; en de (iii) volledige disclaimer. Dergelijke content wordt daarom alleen aangeboden als algemene informatie. Wees u er daarnaast vooral van bewust dat de inhoud op ons online handelsplatform geen verzoek of aanbieding omvat om transacties op de financiële markten uit te voeren. Het beleggen op welke financiële markt dan ook vormt een aanzienlijk risico voor uw vermogen.
Alle materialen die op ons online handelsplatform worden gepubliceerd zijn bedoeld voor educatieve/informatieve doeleinden en omvatten geen – en moeten niet worden beschouwd als het bevatten van – financieel, vermogensbelastings- of handelsadvies en aanbevelingen, of een overzicht van onze handelsprijzen, of een aanbod of aanvraag van een transactie in financiële instrumenten of ongevraagde financiële promoties voor u.
Alle content van derden, alsmede content die is voorbereid door XM, zoals opinies, nieuws, onderzoeken, analyses, prijzen en andere informatie of koppelingen naar externe websites op deze website worden aangeboden op een 'zoals-ze-zijn'-basis, als algemene marktcommentaren, en vormen geen beleggingsadvies. Voor zover dat content wordt beschouwd als beleggingsonderzoek, moet u zich ervan bewust zijn en accepteren dat de content niet bedoeld was en niet is voorbereid in overeenstemming met de wettelijke vereisten die zijn opgesteld om de onafhankelijkheid van beleggingsonderzoek te bevorderen en als zodanig onder de geldende wetgeving en richtlijnen moet worden beschouwd als marketingcommunicatie. Zorg ervoor dat u onze Mededeling over niet-onafhankelijk beleggingsonderzoek en risicowaarschuwing in verband met de voorgaande informatie doorneemt en begrijpt; die kunt u hier lezen.
