Authorities' Efforts in Vain? The Yen Surges but Quickly Fades, with Major Top Signals Emerging on the Technical Chart! AUD/JPY Becomes the Only Exception.
The yen weakened again after a brief spike, reportedly influenced by suspected intervention from Japan's Ministry of Finance and/or central bank. The dollar/yen pair rebounded significantly this week but faced resistance near key levels; the euro/yen and the Australian dollar/yen showed divergent signals with contrasting movements. It has been over three full trading sessions since the reported intervention occurred. Although no official confirmation has been issued, Nikkei reported hours after the event that the intervention did take place. At the time, the yen surged sharply, resulting in an intraday range exceeding 500 basis points for the dollar/yen pair, leaving traders generally on high alert for the next potential intervention. Historical data indicates that the majority of volatility was concentrated on the day of the intervention.
Middle East conflicts deal a heavy blow to the European economy! The euro records its worst quarterly performance in 2024, with bearish sentiment reaching a four-year high.
Driven by the rise in energy prices amid the Middle East conflict, the euro is set to post its worst quarterly decline against the dollar since 2024, with a cumulative drop of 2.5% in March. The options market indicates that demand for downside protection on the euro has reached a four-year high, reflecting a surge in bearish sentiment. The energy shock coincides with a slowdown in economic activity, offsetting the fiscal tailwinds that had bolstered the euro at the start of the year.
Decision Analysis: Trump's Move Shakes Wall Street! Gold Emerges as an All-Purpose Hedge, Iran Suddenly Hit with Tariffs
On Tuesday (January 13), a surge in Japan's stock market drove an overall rise in the Asian market, fueled by growing investor optimism toward "all things AI-related." Meanwhile, uncertainties surrounding the Federal Reserve's independence benefited gold but weighed on the US dollar. Oil prices climbed due to supply concerns sparked by turmoil in Iran, as US President Donald Trump warned that any country doing business with Iran would face a 25% tariff on its trade with the United States.
Trump's chip tax on China has been postponed! Gold and silver surge to new records—beware of a potential pullback after the 'Santa Claus rally.'
Global stock markets traded moderately on Wednesday (December 24), with European stocks remaining largely unchanged. U.S. stock markets hovered near historical highs ahead of the Christmas holiday, as the seasonally favorable time window for equities opened. Meanwhile, gold and silver continued to set new records.
Express News | The euro rose to a daily high against the yen at 181.36 following a strong earthquake in Japan.
Expectations of interest rate hikes in Japan support the yen, with EUR/JPY trading steadily ahead of European retail sales data.
During the early trading session on Thursday, EUR/JPY was trading around 181.10, with an overall stable trend. Remarks by Kazuo Ueda, Governor of the Bank of Japan (BOJ), earlier this week indicated that the central bank will weigh the pros and cons of raising interest rates and believes that the likelihood of achieving its baseline scenario for economic growth and inflation is gradually increasing. The market currently estimates an approximately 80% probability of a rate hike by the BOJ in December, which provides temporary support for the yen. "Expectations of a BOJ rate hike are driving buying pressure for the yen in the short term, creating headwinds for the euro." The euro is supported by signals from the European Central Bank (ECB) indicating a policy bottom. An unexpected uptick in Eurozone inflation in November has led to widespread expectations that the ECB will not cut rates further in the near term.