- USD/JPY clocked a session high of 113.50 soon before press time and could rise further if both the equities and Treasury yields continue to rise.
- FX desks are offering anti-risk JPY amid risk-on in the US equities.
The USD/JPY pair is currently trading at 113.45 - up 0.15 percent on the day - having clocked a low of 113.20.
Safe havens like the Japanese yen are losing altitude, courtesy of the rising odds of US-China trade deal and the resulting risk-on in the equities.
At press time, major Asian equity indices are flashing green, extending Wednesday's risk-on rally, as China is reportedly planning to open up its economy to foreign companies. These measures could be rolled out in the first quarter of 2019 and could pave for a permanent trade truce between two of the world's biggest economies.
As a result, markets may continue to buy risk in the short-term, pushing the anti-risk assets lower across the board. The USD/JPY, in particular, could fly high, having bounced off strongly from the crucial 100-day moving average (MA) support earlier this week, if the improved risk appetite lifts US treasury yields.
Currently, the 10-year US Treasury yield is seen at 2.91 percent - up six basis points from the recent low of 2.85 percent.
USD/JPY Technical Levels
Today Last Price: 113.45
Today Daily change: 26 pips
Today Daily change %: 0.230%
Today Daily Open: 113.19
Previous Daily SMA20: 113.17
Previous Daily SMA50: 113.01
Previous Daily SMA100: 112.33
Previous Daily SMA200: 110.69
Previous Daily High: 113.52
Previous Daily Low: 113.14
Previous Weekly High: 113.83
Previous Weekly Low: 112.23
Previous Monthly High: 114.25
Previous Monthly Low: 112.3
Previous Daily Fibonacci 38.2%: 113.28
Previous Daily Fibonacci 61.8%: 113.37
Previous Daily Pivot Point S1: 113.04
Previous Daily Pivot Point S2: 112.9
Previous Daily Pivot Point S3: 112.66
Previous Daily Pivot Point R1: 113.43
Previous Daily Pivot Point R2: 113.67
Previous Daily Pivot Point R3: 113.81
Japanese Finance Ministry on Friday said that it would cut the issuance of Japanese government bond (JGB) by JPY 4.8 trillion in the fiscal year 2019/20.
Other things being equal, the reduced bond supply would put upward pressure on yields.
Source: https://www.forexcrunch.com/japan-to-cu ... n-2019-20/
When it comes to the biggest monetary experiment in modern history, namely Japan's QE which has seen the BOJ buy enough Japanese bonds to match the GDP of Japan, there is nothing more important than the BOJ having accurate metrics to determine if its "inflation targeting" is working, i.e., if wages and broader inflation are rising. Alas, the recent news that Japan's labor ministry published erroneous statistics for years, has raised doubt about not only the accuracy of economic analysis released by the Bank of Japan, but prompted investors to doubt absolutely every economic report published by Tokyo.
For those who are unfamiliar with the latest economic fake news scandal, on Wednesday Japan's labor ministry revised its monthly labor survey for the period between 2012 and 2018 admitting it had overstated nominal year-on-year wage increases by as much as 0.7 percentage point between January and November of last year, to take just one example.
Unfortunately, there are many other examples, and according to an Internal Affairs Ministry report released late Thursday, nearly half of Japan’s key economic government statistics need to be reviewed with 22 discrete statistics, or roughly 40% of the 56 key government economic releases, turning out to be "fake news" and in need to be corrected.
This is a major problem for Kuroda and the Bank of Japan which uses statistics from the labor ministry to compile two key pieces of economic data, in making its ongoing decisions whether to continue, taper or expand QE.
https://www.zerohedge.com/news/2019-01- ... -fake-news