GBP/JPY edges lower on Wednesday as fresh intervention warnings from Tokyo lift the Japanese Yen (JPY) across the board. At the time of writing, the cross trades around 214.82, down 0.25% on the day.

BNY’s Bob Savage highlights that USD/JPY remains close to 160.00 as markets price a high probability of a June BoJ rate hike, yet see Governor Ueda as insufficiently hawkish. Japanese authorities stress G7 agreement on limiting excessive FX volatility and pledge cooperation with the U.S.

Brazil Industrial Output (YoY) registered at 2.7% above expectations (1.7%) in April

Brazil Industrial Output (MoM) came in at 0.7%, above expectations (0.4%) in April

The Euro (EUR) resumed its downtrend against a stronger US Dollar (USD) on Wednesday, with bears testing support at the 1.1600 level.

Rabobank’s Senior FX Strategist Jane Foley discusses USD/JPY’s sharp pullback after comments from PM Takaichi and Bank of Japan (BoJ) Governor Ueda. Foley highlights renewed FX intervention risks, a still-firm US Dollar (USD) and speculation over a June BoJ rate hike.

Swiss National Bank (SNB) Chairman Martin Schlegel said during the European trading session on Wednesday that the central bank has increased its readiness to intervene in the Forex market.

EUR/GBP trades around 0.8635 on Wednesday at the time of writing, with limited movement on the day as investors assess a fresh batch of revised macroeconomic data from the Eurozone and the United Kingdom (UK).

The New Zealand Dollar (NZD) depreciates for the third consecutive day against a stronger US Dollar (USD) on Wednesday, hitting lows below 0.5900.

The Japanese Yen (JPY) reflects a sudden jump against its major currency peers in the European trading session on Wednesday. There is a noticeable uptick in the Asia-Pacific currency against its peer, pushing EUR/JPY over 0.3% down to near 185.40.

Eurozone’s HCOB Composite Purchasing Managers’ Index (PMI) has been revised higher to 48.5 in May, better than the flash reading and estimates of 47.5. This signifies that the overall business activity continues to contract, but at a moderate pace.

Societe Generale notes the USD/ZAR downtrend has paused after an interim low near 15.63 in January, with the pair struggling to reclaim its 200-day moving average. A recent pivot high around 16.80–16.92 forms key resistance, whose break would confirm a larger bounce.

Eurozone Producer Price Index (YoY) above forecasts (4.8%) in April: Actual (4.9%)

Eurozone Producer Price Index (MoM) came in at 0.6%, above forecasts (0.4%) in April

The AUD/USD pair drops to the 0.7150 area during the first half of the European session on Wednesday, reversing the previous day's positive move amid a broadly firmer US Dollar (USD).

The Japanese Yen (JPY) bounced up from five-week lows against the US Dollar (USD) on Wednesday, turning positive on the daily chart, as Japan’s Prime Minister Sanae Takaichi warned that Tokyo is ready to take action against Yen weakness.

USD/IDR trades near the record high of 18,037 reached on Wednesday. The US Dollar (USD) remains firmly on the front foot, driving the currency pair higher as a sharp escalation of geopolitical tensions in the Middle East fuels a sweeping wave of safe-haven demand.

The USD/CAD pair attracts fresh buyers following the previous day's directionless price moves and sticks to modest intraday gains, around mid-1.3800s, through the first half of the European session on Wednesday.

Eurozone HCOB Composite PMI above forecasts (47.5) in May: Actual (48.5)

Eurozone HCOB Services PMI came in at 47.7, above forecasts (46.4) in May

Germany HCOB Composite PMI came in at 48.8, above forecasts (48.6) in May

Germany HCOB Services PMI above forecasts (47.8) in May: Actual (48.1)

France HCOB Composite PMI above expectations (43.5) in May: Actual (44.9)

France HCOB Services PMI came in at 44.3, above forecasts (42.9) in May

The Euro (EUR) is down against its major currency peers, trading 0.1% lower to near 1.1618 during the European trading session on Wednesday.

Italy HCOB Services PMI above forecasts (49.1) in May: Actual (49.4)

DBS Bank’s Philip Wee highlights that USD/JPY is trading around 160, a level where intervention risk remains high.

The GBP/JPY cross drifts lower on Wednesday, snapping a three-day winning streak to the 215.50 area or over a one-month high touched the previous day.

The AUD/JPY cross loses momentum to around 114.45 during the early European trading hours on Wednesday. Verbal intervention from Japanese authorities provides some support to the Japanese Yen (JPY) and acts as a headwind for the cross. 

Here is what you need to know on Wednesday, June 3: