Asian Session Recap – Sept. 19, 2014

  • Scotland votes “No” on U.K. independence
  • Japanese all industries activity index down by 0.2% in July
  • BOJ Gov Kuroda: Japan on track to reach 2% inflation target
  • German PPI and euro zone current account balance due

What a relief for the pound! Exit polls on the Scottish referendum revealed that the “No” camp would escape with a narrow victory, ensuring that the U.K. would stay intact. GBP/JPY jumped to the 180.00 levels while GBP/USD is testing the 1.6500 major psychological level as of this writing.

Pound crosses saw more action, as GBP/AUD is up nearly 250 pips while GBP/NZD has also chalked up more than 200 pips in gains. Official results of the independence vote won’t be released until later today but it appears that William Wallace – I mean, Alex Salmond – and his camp have already accepted defeat.

Over in Japan, the all industries activity index showed a 0.2% drop for July as opposed to the projected 0.4% gain. USD/JPY jumped to new highs yet again, as the forex pair topped at 109.47 in the past few hours. Other yen pairs also enjoyed strong gains, with EUR/JPY hovering around the 141.00 handle and CAD/JPY peaking at 99.83. AUD/JPY, on the other hand, failed to extend its gains as the pair is still stalling below the 98.00 handle.

BOJ Governor Kuroda mentioned that the yen’s movement reflects fundamentals and that the recent price action has been desirable. He added that Japan is halfway towards meeting its 2% inflation target, perhaps aided in part by yen weakness.

The forex calendar shows that data is light in the next few hours, with only medium-tier reports such as German PPI and euro zone current account balance due. Take note though that the results of the Scottish referendum could result to strong pound moves in the upcoming trading session.

U.S. Session Recap

Bonnie and Clyde, peanut butter and jelly, Justin Bieber and his hair. Some things just go well together.

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