JPY Weekly - 13 August 2024
- Aug 13, 2024
Week in review
The USD/JPY started the week soft at around 146.50 early morning on 5 August. The pair fell below 146 as traders entered the market during the Tokyo session, then dropped to 141.68, the lowest point since January, driven down by panic selling alongside a sharp fall in the Nikkei 225. The USD/JPY rebounded above 144 as European investors came online, but then fell back below 142 in volatile trading. The pair rallied back to nearly 145 in US trading hours as UST yields rose after the ISM non-manufacturing index beat market expectations. On 6 August, the USD/JPY started steady in the morning, rising to around 146.50, but fell back below 144.50 around the time of the fixing rate announcement, as volatility continued amid low market liquidity. The pair became increasingly bottom-firm and seemed to establish a floor around 144 as the Nikkei 225 rallied strongly, then jumped to around 147.50 after BOJ Deputy Governor Shinichi Uchida said on the morning of 7 August that the BOJ "will not raise its policy interest rate when financial and capital markets are unstable." The USD/JPY rose to a high for the week of 147.93 toward the end of the session on the same day. On 8 August, the USD/JPY fell to around 145.50 from the morning amid continued low liquidity but recovered to above 147 in US trading hours as UST yields rose after US new jobless claims improved less than the market had expected. The pair softened somewhat on 9 August and was trading above 146.50 at the time of writing this report (Figure 1). This week the G10 currencies saw an unwinding of long yen, Swiss franc, and US dollar positions as risk tolerance improved (Figure 2).
FIGURE 1: USD/JPY
Note: Through 14:30 JST on 9 August
Source: EBS, Refinitiv, MUFG
FIGURE 2: MAJOR CURRENCIES' RATE OF CHANGE VS USD THIS WEEK
Note: Through 14:30 JST on 9 August
Source: Bloomberg, MUFG