Japan government to present nominees for new BOJ governor on 14 February – sources 0 (0)

<p style=““ class=“text-align-justify“>That will include the nominees for the deputy governors position as well, which will be presented to parliament. That fits with the earlier report from <a target=“_blank“ href=“https://www.forexlive.com/news/japan-government-plans-to-present-boj-governor-nominees-early-next-week-report-20230209/“ target=“_blank“ rel=“follow“>here</a>. Mark that down in your calendars. This Valentine’s Day is going to be quite an eventful one (US CPI data on the cards as well), not just for dinner dates. 😉</p>

This article was written by Justin Low at www.forexlive.com.

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BOE’s Pill: There is a danger of over-steering on rates, given lags in transmission 0 (0)

<ul><li>We have to be prepared to see through policy tightening</li><li>Need to address potential upside risks to inflation</li></ul><p style=““ class=“text-align-justify“>The change in language by the BOE last week reaffirms the headline comment, so there isn’t much of anything new. There will be more rate hikes to follow by the central bank but in all likelihood, we are to see a 25 bps increment next.</p>

This article was written by Justin Low at www.forexlive.com.

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The Yen Starts to Rise 0 (0)

<p>Back in October, the
USD/JPY currency pair was holding at 151.95, which left the yen at its weakest
level against the US dollar in 30 years. </p><p>Unstoppable inflation
called into question the central bank’s view that rising costs were temporary,
and that the economy needed another dose of stimulus. Late in November,
analysts saw little hope interest rates would start rising any time before the
end of Governor Haruhiko’s tenure, in April 2023.</p><p>By the new year,
however, the yen was to see gains of as much as 16% due to the intervention of
the Japanese government in the currency trading market, but also due to the
widespread belief that the Bank of Japan was on course to tightening up its
super-dovish monetary policy. </p><p>On January 3rd 2023 one
<a target=“_blank“ href=“https://www.bloomberg.com/news/articles/2023-01-03/dollar-makes-strong-start-to-2023-after-months-long-slump“ target=“_blank“ rel=“follow“>US dollar would buy you only 129.79 yen</a>, and “The yen’s current level is
significantly undervalued, even after the recent rally”, suggested Rajeev De
Mello of GAMA Asset Management. </p><p>Join us now for a
currency trading adventure, as we track the yen’s progress since late October,
and also try to decide whether or not its downward slide has finally stopped.</p><p>October</p><p>September 22nd, 2022 was
the date the Japanese government said it was going to take the step, which had
last been taken 24 years before, of directly intervening in the forex market to
support its currency. </p><p>The initial attempt
turned out to be a failure, but policymakers followed this up in October by
quietly spending $42.4 billion towards the same end. </p><p>By the end of October,
when a dollar was worth 148.57 yen, analysts like Atsushi Takeda of Itochu
Research Institute felt that “big interventions at the level we’ve seen in
September and October could happen another three to five times”. </p><p>November</p><p>In the second week of
November, <a target=“_blank“ href=“https://www.bloomberg.com/news/articles/2022-11-11/yen-gains-past-140-per-dollar-for-first-time-since-september-laccknib“ target=“_blank“ rel=“follow“>the yen climbed over 5%</a>, which was more than it had done since 2008. The reason
seemed to be an unusually slow US inflation reading, which gave traders hope
the US Federal Reserve would ready itself to slow its rate hikes. </p><p>“It is an important
turning point for the yen”, pronounced Lee Hardman of MUFG at the time. On
November 11th, when the USD/JPY was at 138.78, the yen had still recorded
losses of 17% against the USD for the year due to the Bank of Japan’s (BOJ)
prolonged dovishness.</p><p>Governor Haruhiko
Kuroda of the BOJ had been striving to achieve stable inflation of 2% for ten
years. </p><p>Prices were rising,
however, faster than they had done since 1982, sparked by the high costs of
energy and the months of sluggish yen performance. Processed food in the
country, which is largely imported and therefore vulnerable to yen weakness,
shot up by 6.7% in the first three weeks of November. A stimulus package from
the government, worth $210 billion, had been set in place the previous month to
help out consumers. </p><p>December</p><p>The first day of
December marked the fifth consecutive day of <a target=“_blank“ href=“https://play.google.com/store/apps/details?id=iforexone.clients.android“ target=“_blank“ rel=“follow“>yen gains in the currency trading</a> market, bringing its recovery since October
up to 13%. Later in the month, to analysts’ surprise, the BOJ’s big policy
adjustment arrived. </p><p>The central bank raised
the cap on its ten-year bond yields, which seemed to justify hopes they were
poised to grow more hawkish. The result was a big surge of 4.8% for the yen on
December 21st. </p><p>On that day, when the
yen was trading at 131.93 to the dollar, Amir Anvarzadeh of Asymmetric Advisors
said, “The yen will likely become one of the strongest currencies next
year”. </p><p>Peering Down the Road</p><p>An important reason for
the BOJ’s worries that raising interest rates too early might impede the
economy, is that real wages in the country have been shrinking since April
2022, which has been reducing people’s purchasing power. </p><p>On that score, Japanese
consumers can expect prices on about 2,000 products to climb even more in
February or March this year.</p><p>January 3rd saw the yen
make ground against the Australian dollar (0.4%), the Norwegian krone (0.6%),
and the Canadian dollar too (0.6%). As the new year got underway, Mingze Wu of
StoneX Group wondered “whether the BOJ will be happy with current developments
or will they step in to weaken the yen again”.</p><p>Erik Nelson of Wells
Fargo foresaw a path for the yen to reach 125 to the dollar, and then even to
100, but “this relies on inflation in Japan continuing, growth trajectory
remaining quite strong and BOJ at least providing a little bit more lift in
those nominal yields”. Other analysts believed, in the short term, that the yen
wouldn’t get much stronger than 125 to the USD.</p>

This article was written by ForexLive at www.forexlive.com.

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BOE’s Tenreyro: In my view, rates are too high right now 0 (0)

<p style=““ class=“text-align-justify“>Is she trying to imply that at current levels, the bank rate is at sufficiently restrictive territory to cause a massive drag on the economy? Mind you, Tenreyro voted for a 25 bps rate hike in November when the BOE did 75 bps and then voted to keep the bank rate unchanged in December and last week.</p><p style=““ class=“text-align-justify“>Update: She is even throwing in talk of a rate cut now, saying that she would consider such a move at this present time but can’t say at which meeting that she would vote for such an option.</p>

This article was written by Justin Low at www.forexlive.com.

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Japan government plans to present BOJ governor nominees early next week – report 0 (0)

<p style=““ class=“text-align-justify“>The list of nominees will include that for the BOJ governor and deputy governors, with it to be presented to parliament. There were plenty of reports suggesting that it could come as soon as tomorrow but it seems like some time around 14 February is more likely now. In any case, I would just say it’s best to be prepared for it coming any time from now (rumours as well) until the next week.</p>

This article was written by Justin Low at www.forexlive.com.

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US MBA mortgage applications w.e. 3 February +7.4% vs -9.0% prior 0 (0)

<ul><li>Prior -9.0%</li><li>Market index 249.5 vs 232.4 prior</li><li>Purchase index 190.0 vs 184.3 prior</li><li>Refinance index 549.3 vs 466.6 prior</li><li>30-year mortgage rate 6.18% vs 6.19% prior</li></ul>

This article was written by Justin Low at www.forexlive.com.

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Data, data, data… 0 (0)

<p style=““ class=“text-align-justify“>It’s been a real quiet session in Europe so far and the lack of any major economic releases today is one reason why that has been the case. In this environment, it’s all about the next big data and even Powell emphasised on it yesterday in saying that will determine the Fed’s reaction curve to the rates outlook. Here’s some food for thought over the past week:</p><ul><li><a target=“_blank“ href=“https://www.forexlive.com/news/the-market-will-go-where-the-data-takes-it-20230202/“ target=“_blank“ rel=“follow“>The market will go where the data takes it</a></li><li><a target=“_blank“ href=“https://www.forexlive.com/news/was-the-ecb-that-dovish-yesterday-20230203/“ target=“_blank“ rel=“follow“>Was the ECB that dovish yesterday?</a></li><li><a target=“_blank“ href=“https://www.forexlive.com/news/is-the-market-just-scaring-itself-or-is-the-fear-justified-20230206/“ target=“_blank“ rel=“follow“>Is the market just scaring itself or is the fear justified?</a></li><li><a target=“_blank“ href=“https://www.forexlive.com/news/that-powell-feeling-20230208/“ target=“_blank“ rel=“follow“>That Powell feeling</a></li></ul><p style=““ class=“text-align-justify“>The US consumer price inflation data next week can’t come soon enough.</p>

This article was written by Justin Low at www.forexlive.com.

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USD/JPY to 120 looks like the target this year – ING 0 (0)

<p style=““ class=“text-align-justify“>ING notes that:</p><p style=““ class=“text-align-justify“>“The Bank of Japan is now garnering much more focus than it has in years. Most pressing is the replacement of Governor Haruhiko Kuroda, who leaves in April. A successor will be presented to parliament on 10 February. The favourite, Deputy Governor Masayoshi Amamiya, is seen as the dovish continuity candidate.” </p><p style=““ class=“text-align-justify“>“Any surprise choice of the more hawkish Hiroshi Nakaso could probably send the Yen a lot stronger, with pressure building for 10-year JGB yields to burst above their current 0.50% ceiling.” </p><p style=““ class=“text-align-justify“>“USD/JPY has mainly been driven by the weaker dollar story, but 120 looks like the target this year, helped by the BOJ and lower energy prices.”</p><p style=““ class=“text-align-justify“>Well, it’s a trade that I would say that timing is also somewhat important as rate differentials are still very much in favour of the dollar at the moment (them swaps can be painful).</p>

This article was written by Justin Low at www.forexlive.com.

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Breaking News: Finvasia Group Secures Investment Banking Licence 0 (0)

<p class=“MsoNormal“>After taking the fintech industry by storm with its thought-provoking technology, Finvasia Group makes strides into an industry led by big names.</p><p class=“MsoNormal“>On 12th January 2023, the global fintech industry leader Finvasia Group obtained its Investment Banking Licence from the Financial Services Commission of Mauritius (FSC). </p><p class=“MsoNormal“>Regarded as one of the prominent regulators for the non-bank financial services sector and global business, the FSC oversees the activity of operators in the financial services sector, including Provident Funds, Superannuation Funds, Virtual Asset Service Providers, and other Investment Service Providers.</p><p class=“MsoNormal“>Sarvjeet Virk, Finvasia Group Co-founder and CMD said: “Obtaining the FSC Investment Banking Licence is a crucial milestone for Finvasia Group, opening a new chapter in our company’s history. This is only the beginning of an even more exciting journey, allowing us to ramp up our financial services offering globally.”</p><p class=“MsoNormal“>Established in 2009 in Canada, Finvasia set out to be one of the world’s leading asset management companies overseeing and growing the portfolios of large corporations and global hedge funds. </p><p class=“MsoNormal“>Seeing sustained growth, in 2011, the investment firm forayed into the Indian capital markets as a Financial Institutional Investor (FII). The volumes witnessed by the company were so large at that time that acquiring requisite regulatory licences from India’s top exchanges, NSE, BSE, MCX, NCDEX and AMFI, seemed like an organic progression.</p><p class=“MsoNormal“>With all these licences in place, co-founders and brothers Sarvjeet Singh Virk and Tajinder Virk, started exploring India’s retail trading segment. Observing the systemic flaws and the frequent malpractices of middlemen and brokers’ vested interests in churning trades and topping up spreads to earn higher commissions, they decided to take a different turn.</p><p class=“MsoNormal“>Promoting a technology-enabled, and thus fair and transparent approach to trading and investing, Finvasia launched and acquired a number of flagship brands with a resounding name in India and internationally, including Shoonya, ZuluTrade, Fxview,AAAFx, CapitalWallet, ActTrader, to only name a few.</p><p class=“MsoNormal“>Adding the investment banking licence to its already large spectrum of approvals, Finvasia Group launches into an industry associated with exclusive investment banks such as Charles Schwab, Blackrock, Vanguard, Lloyds, Barclays, UBS and others. </p><p class=“MsoNormal“>Tajinder Virk, Finvasia Co-founder and CEO said: “It is a great step forward for Finvasia Group and another opportunity for us to carry our vision to create a global financial ecosystem at Finvasia. An investment banking licence is one of the notable financial regulations that a financial institution and fintech group such as ours can attain.”</p><p class=“MsoNormal“>Under its FSC licence, the fintech and financial services group will offer the following services:</p><p class=“MsoNormal“>● Investment Dealer (Full-Service Dealer including underwriting)</p><p class=“MsoNormal“>● Investment Adviser (Unrestricted) Licence</p><p class=“MsoNormal“>● Investment Adviser (Corporate Finance Advisory)</p><p class=“MsoNormal“>● Asset Management</p><p class=“MsoNormal“>● Distribution of Financial Products</p><p class=“MsoNormal“>Notably, the FSC licence coverage expands on all Finvasia brands. The company has not yet disclosed when these services will become available or which brands will facilitate access to which of these exclusive financial services and products. For more information about the company, please visit <a target=“_blank“ href=“https://finvasia.com/“ target=“_blank“ rel=“follow“>https://finvasia.com/</a>.</p><p>About Finvasia</p><p class=“MsoNormal“>Finvasia is a multi-disciplinary, multinational organisation that owns and operates over a dozen brands across financial services, technology, real estate and healthcare verticals.</p><p class=“MsoNormal“>Over the last 13 years of its history, Finvasia has managed funds for some of the notable hedge funds of the Wall street, operates the first and only commission free ecosystem for listed and fee based financial products in India, provided technology to some of the notable listed and unlisted financial services entities across the globe and has catered to over a few million clients in over 180 countries directly or via one of its subsidiaries.</p><p class=“MsoNormal text-align-start“>The team comprises over 350 employees that work in physical offices across India, the UK, Greece, Cyprus, Canada and USA. Finvasia, along with its subsidiaries and sister concerns, is registered with a gamut of regulatory bodies across the world in various capacities.</p>

This article was written by ForexLive at www.forexlive.com.

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Dollar slightly on the softer side on the day 0 (0)

<p style=““ class=“text-align-justify“>It has been a poor start to the new year for the dollar but the bulls managed to draw a line in the sand to the declines late last week. The move was helped by the strong US jobs report and after a bit of a recovery, we are starting to see that momentum wane since late yesterday.</p><p style=““ class=“text-align-justify“>As things stand, we’re sort of caught in a position where there isn’t much to lean on in terms of the technicals for dollar pairs at the moment. The charts will better explain the situation.</p><p style=““ class=“text-align-justify“>For EUR/USD, sellers defended the 1.1000 mark and on the weekly outlook, they also defended a firm break above the 50.0 Fib retracement level of the downswing since 2021 at 1.0942. Adding to that, there is also key resistance just above the 1.1000 mark in the form of its 100-week moving average (red line) at 1.1058 currently.</p><p style=““ class=“text-align-justify“>Those are all key upside levels to watch and buyers require a break above that to really extend the momentum towards 1.1200 next.</p><p style=““ class=“text-align-justify“>But the recent drop perhaps has more room to extend further, with the corrective move seeing little in the way before a potential drop towards the first week of January low near 1.0500. That means EUR/USD has roughly a 500 pips range to play around now and price action is right smack in the middle of that.</p><p style=““ class=“text-align-justify“>Looking over to GBP/USD, the pair has failed to try and get above its December highs at 1.2443-46 with little help from the BOE. Amid the recent dollar rebound, it has fallen back to just under 1.2000 yesterday before recovering a little to near 1.2100 today.</p><p style=““ class=“text-align-justify“>The resistance noted above is the key upside level to watch for any extension higher while downside momentum remains contained unless sellers can breach 1.2000 and the 200-day moving average (blue line) at 1.1945. Those are the battle lines for cable at the moment.</p><p style=““ class=“text-align-justify“>Meanwhile, USD/JPY has essentially closed the gap higher from the start of the week after the retreat yesterday. The jump higher on Monday struggled to get above the 11 January high at 132.87 and sellers are capitalising to try and keep the downside momentum running.</p><p style=““ class=“text-align-justify“>For now, the pattern of lower highs, lower lows is somewhat still intact and I would argue that it would require buyers to break 135.00 to really invalidate that sequence.</p><p style=““ class=“text-align-justify“>Then, we have AUD/USD which saw its strong gains since the turn of the year limited by the August highs at 0.7125-36. Since then, it has been a sharp retreat to below 0.6900 at the start of this week before recovering some poise in the past few sessions to try and look towards 0.7000 again.</p><p style=““ class=“text-align-justify“>However, key resistance still resides in the August highs as noted above while short-term support at 0.6855-70 will be one to watch before the 200-day moving average (blue line) comes into play at 0.6805. That essentially leaves a roughly 300 pips range for the pair to roam around and again, we’re more or less right in the middle of that at the moment.</p><p style=““ class=“text-align-justify“>To sum up, the dollar selloff since the start of the year has encountered a pause but the greenback itself is unable to keep the rebound going in the last few sessions. That is leaving for a bit of a power struggle in the technicals for now, with there being little key levels for traders to lean on for a fresh conviction.</p><p style=““ class=“text-align-justify“>In short, FX traders could really use with a trigger or some more convincing market flows to really guide the playbook at the moment. And we might not get there until the US CPI data next week.</p>

This article was written by Justin Low at www.forexlive.com.

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