Yen Leads Gains on Geopolitical Risks and BOJ Bets
The yen reversed Wednesday’s losses, supported from haven flows and as the Bank of Japan’s decision next month remains live.
USD/JPY drops as much as 0.9% to 154.12; Ueda reiterated that he’s closely watching currency impacts on the economy and inflation, and said it’s not possible to predict the outcome of the central bank’s policy meeting.
Money markets price 15 basis points of interest rate hikes in December and fully price a quarter-point increase by March.
Ukraine said Russia launched an intercontinental ballistic missile during an attack on the country following Kyiv’s strikes with western-made weapons inside Russian territory.
Oil prices rise while e-minis hold earlier losses; one-month risk reversals trade at a 147 basis-point premium in favor of the yen, the most since mid-September.
The Bloomberg Dollar Spot Index slips 0.1% after rising 0.4% on Wednesday; Treasury 10-year yields down two basis points to 4.39%.
New York Fed President John Williams said inflation is “not quite there yet”.
EUR/USD reverses modest gains to trade as much as 0.3% lower at 1.0514; corporate demand at dips remains in play, while hedge funds look to fade rallies up to 1.0580 and then near 1.0650: trader.
Potential trade levies during a second Donald Trump presidency wouldn’t derail the European Central Bank’s easing plans, Governing Council member Francois Villeroy de Galhau said.
EUR/CHF down 0.3% to 0.9292, lowest since Aug. 6; EUR/JPY -1% to 162.24.
GBP/USD comes under pressure after the London open, drops 0.2% to 1.2629; BOE rate-setter Catherine Mann speaks in a fireside chat with Brown Brothers Harriman later Thursday.
Source : Bloomberg
