The USDJPY
failed to break through the 100 level overnight, but is it just the calm before the storm? With no new data coming out of the U.S. the dollar actually pulled back to 98.58 during this mornings session.
The greenback is likely consolidating ahead of FOMC minutes, which are released tomorrow. Traders will be looking for any signs that the Fed will ease back on money printing, which would add strength to the dollar. Investors should be wary however, as the FOMC minutes refer to a meeting which took place before Japan announced their massive stimulus program.
Meanwhile traders were skeptical of St. Louis Fed President
James Bullard’s comments, that March’s disappointing payroll numbers could be revised upwards. Bullard still believes the unemployment rate will drop to 7%. Whilst it’s more than likely the rate will be revised upwards, it’s doubtful that it will be revised to the point where labor market concerns are eliminated.
More Coverage of the Day’s Top Story
- Reuters: Yen’s slide halts just before 100 to dollar. – The yen rallied on Tuesday, snapping a three-day decline against the dollar as it neared 100 to the U.S. currency, while expectations for modest growth in corporate earnings capped stocks and overshadowed a fall in Chinese inflation.
- WSJ: BlackRock Pares Anti-Yen Bets, but Calls BOJ Action a ‘Big Deal’ - BlackRock had been short the Japanese yen, but dialed back its bearish bet before the Japanese central bank’s announcement of a massive bond-buying program – its latest effort to stimulate the Japanese economy. He took some cash off the table because the yen’s decline – about 14% so far this year against the U.S. dollar – has been a swift move in a short period of time, Mr. Rieder said.
- FT: Yen higher as profit taken on dollar gains. – The yen strengthened on Tuesday morning after earlier hitting a fresh multiyear low against the dollar, as traders took profits on bets that the Japanese currency would weaken after the Bank of Japan promised to go on a historic bond-buying spree.
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