USD/JPY is trading higher despite a stronger-than-expected February CPI print – ING
Source Fxstreet
The stronger US Dollar (USD) momentum is showing in USD/JPY this morning, with the pair trading higher despite a stronger-than-expected February CPI print overnight, ING's FX analyst Francesco Pesole notes.
May will see the next move in BoJ rates
"Core inflation came in at 3.0% year-on-year versus expectations of 2.9%. The print is still marking a small slowdown from January (3.2%) and markets may therefore lack the incentive to bring the next hike forward to May. Our economist’s base case is instead that May will see the next move in rates."
"We suspect that USD/JPY is facing a similar unwinding of USD shorts to the rest of the G10 pairs. Given the yen’s safe-haven appeal ahead of US tariff announcements and our hawkish view on the Bank of Japan, we are not convinced a USD rebound will be played primarily via a materially higher USD/JPY."
Disclaimer: For information purposes only. Past performance is not indicative of future results.
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Spot gold closed at 3,876 on Thursday, down 2.8% and its lowest close in more than a year, with an intraday low near 3,852. The dollar is at a 19-month high of 103.21 and the 10-year yield is at 5.10%, so the price move is easy to explain. What is harder to explain is who sold: central banks bought 321 tonnes in Q3, the PBoC added for a 24th straight month, ETF holdings are near a record 4,256 tonnes, and roughly 95% of the futures selling came from non-reportable and sovereign-type accounts rather than hedge funds. This piece separates the two books that have to balance.
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