The Japanese yen fell to a fresh 24-year low today versus the U.S. dollar.
The yen’s fall to new lows started yesterday when in an interview with Financial Times, Japan’s Prime Minister Fumio Kishida reinforced his support for the Bank of Japan’s loose monetary policy.
Which in contrast to the Fed’s tighter monetary policy, weakens the yen against the dollar due to the expectation of widening interest rate differentials.
The bearish momentum of USD/JPY increased today.
The price of the USD/JPY reached as high as 146.96.
The last time the yen was this week, “The First Night” by Monica, was the number one single on the radio!
Japan spent ¥2.84tn ($19.7b billion) in an intervention last month to stop the yen from weakening further.Before the intervention, USD/JPY had reached a high of 145.89 and then after the intervention, fell to a low of 140.34.
I’ve circled the candle where the intervention happened in purple.
As you can see, it’s now trading over 100 pips above the previous high! Did Japan just waste almost $20 billion?
The yen is now down over 27% against the U.S. dollar this year! 💀
Will USD/JPY now head towards 150.00? Or will Japan’s Ministry of Finance (MoF) intervene again?
Let’s review what else happened in the FX market today…
Currency Market Movers
Which currency pairs gained the most today?
As shown by our FX Market Movers page, the “guppy” aka GBP/JPY was the leader of the pack, gaining 1.94% or 311 pips! 🏆
Which currency pairs lost the most today?
EUR/GBP was the biggest loser, falling 1.23% or 108 pips! 😢
Currency Strength
What was the overall strength or weakness of individual major currencies today?
Based on the Currency Strength Meter on MarketMilk™, GBP was the strongest currency. 💪
NZD was the other currency that showed overall strength.
The JPY was the weakest currency.
The British pound rebounded after a sharp fall yesterday after news that the Bank of England has signaled privately to lenders that it was prepared to extend its emergency bond-buying program beyond Friday’s deadline if market conditions demanded such a move was still necessary.
In U.S. news, the FOMC released the minutes from their September meeting. The Fed officials expect higher rates to stay in place. There weren’t any surprises in the minutes so it was a non-event for the USD.
ALL EYES will be on tomorrow’s U.S. CPI report. It will be the most important economic report to watch this week.
A higher-than-expected inflation print will likely ignite further U.S dollar strength.
Currency Short-Term Trends
When it comes to short-term trend strength, the U.S dollar (USD) continues to show the most bullish strength, along with the British pound (GBP)
The Aussie dollar (AUD) shows the most bearish strength.CAD and JPY look to have moved into bearish territory.
Currency Volatility
Which currency was the most volatile today?
Based on our Currency Volatility Meter, it’s the British pound (GBP).
Which currency pair was the most volatile today?
Given that GBP was the most volatile currency, it has to be a GBP pair. But which one?
GBP/JPY. It moved over 2.25% or 358 pips! That’s big volatility!
