North American Summary and Highlights 24 Feb
Overview - Japan PM Takaichi voiced concerns about further BOJ rate hikes, which prompted across the board JPY weakness and this was extended in the Americas.
North American session
The main focus in the Americas remained the JPY, which USDJPY rotated up towards 156.30, but did not have enough momentum to break. Some profit-taking kicked in by lunchtime, with some traders noting that a 25bps BOJ hike is now merely discounted in July rather than June and that the risk of BOJ intervention is rising again. Even so, other JPY bears note that charts have a clear run now to 157.50. The better than expected U.S. consumer confidence data failed to provide direction for the USD, as it did not really move the U.S. Treasury market.
European morning session
The JPY fell noticeably across the board in early European trading, as reports indicated that PM Takaichi had voiced concerns about further BOJ rate hikes in a meeting with BOJ Ueda – a further 25bps hike had been discounted by June. Into mid-morning, the JPY partially retraced some of the losses versus the USD and on a cross rate basis. Other currencies were subdued against the USD, though some traders noted that the fact that the U.S. has implemented 10% section 122 tariffs rather than 15% shows that the administration is less aggressive than Trump’s posturing.