FX Interventions Do Not Change a Currency's Fundamental Course

The Japanese yen is once again in the spotlights during Asian dealings, erasing about half of yesterday’s gains and confirming that FX interventions do not change a currency’s fundamental course.

USD/JPY: US Dollar Weakens After Statements from Federal Reserve Chair

The dollar weakened significantly against the yen – the USD/JPY rate dropped from 157.50 to 153.10 yen per dollar yesterday evening (approximately -2.7%) in less than an hour, although the rate later recovered. The reason lies in the context, specifically the yen's strong strengthening on Monday, when the rate exceeded 160 yen per dollar, as we wrote on the morning of April 29. Perhaps there was another intervention yesterday?

USD/JPY Slides – Did Tokyo Intervene?

It has been a remarkable week for the yen, which has exhibited sharp swings throughout the week. The Japanese yen fell as much as 1% earlier and on Thursday but has pared most of those losses. USD/JPY has risen 0.38% to 155.19 at the time of writing.

Canada's Trade Accounts Register a $2.3 Billion Deficit in March

Before the release of the March trade data, export activity was shaping up to be a decent tailwind to Q1 growth. However, volatility stemming from trade in gold and other metal sectors combined with revisions to last month's data suggest trade may turn out to be a net drag in the first quarter. This is meaningful as it puts downside risk to the most updated forecasts for first quarter GDP growth–including the Bank of Canada's newly revised projections of 2.8%.

Currency Markets an Ocean of Calm

Currency markets are an ocean of calm. The euro loses a few ticks against an equally unconvincing dollar. EUR/USD is testing the 1.07 big figure. The Japanese yen almost fully pared morning losses of a percent or more following an alleged intervention by Japanese officials in late US dealings yesterday.

RBA Decision: Will a Rate Hike be Back on the Table?

The Reserve Bank of Australia is no stranger to policy flip-flops and the May decision may just add to the tally. Having dropped their tightening bias as recently as the last meeting in March, policymakers are staring at an unpleasant inflation picture.

Could They? Should They?

The RBA is on hold until inflation falls further. A scenario necessitating a rate hike is not impossible, but it is unlikely, and it would only take shape later in the year.

Norges Bank and Nonfarm to Round Off a Busy Week

Today we get the US April Jobs Report which will round off the interesting week it has been in markets. We expect non-farm payrolls growth to cool to +200k, as immigration-driven uptick in labour supply continues to boost employment in lower-paying services sectors, but April PMIs suggested that elsewhere demand for labour is weakening. Average hourly earnings growth likely eased to +0.2% m/m SA. In the afternoon, ISM April Services index is also due for release.

After Hawkish Fed Repositioning During April, Short Term Market Risks Skewed Towards Dovish Side

After a hawkish repositioning during April and in the wake of the Fed policy meeting, we think short term market risks are skewed towards the dovish side. Figures that fall in line or shy of the consensus are probably enough to extend a correction higher in core bonds, with Treasuries outperforming. This makes the dollar vulnerable for the time being as well, more so against a risk-on background. EUR/USD’s first topside reference is situated at 1.0807.

Bitcoin’s Downtrend, Solana and Ethereum Form Double Bottom

Crypto market capitalisation rose 3.3% in 24 hours to $2.22 trillion. Local capitalisation bottomed near $2.10 trillion, confirming a sequence of declining local lows (2.3 in March, 2.25 in April) and highs (2.76 in mid-March, 2.67 in early April and 2.46 in late April).