August 19, 2010
Talk about a neck-and-neck competition! After the bulls hustled USDJPY to a peak at 85.69, the bears stepped up their game and brought the pair down to its intraday low of 85.19. But the bulls weren’t ready to give up just yet. They went for another rally and settled USDJPY at 85.46, only 3 pips lower from its opening price.
There was nothing on tap for the yen so the bears just moved according to the market’s risk sentiment. The currency gained against its higher-yielding counterparts although it wasn’t able to punch as much pips out of them as before.
Hmmm, I guess it’s safe to say that risk aversion has somehow toned down but it’s still in the market, lurking... just waiting for the right opportunity to haunt ‘em bulls.
Anyhoo, earlier today the yen lost its ground against the dollar because of reports that the BoJ has started considering additional easing steps to counter the currency’s strength. Uh oh… is an intervention on the yen’s horizon? I think investors won’t be dumping the currency like a hot potato just yet... Well at least not until they know exactly what the central bank is going to do.
However, the Industry Activity report from the Ministry of Finance at 12:30 may affect their decision. It is expected that production in the industrial sector of the country fell by 0.3% in June. If the figure prints worse than expected, the bears may lose their upper hand as this would just give the BoJ another reason to halt the yen’s gains.
"The only cable I watch is the pound baby."