In the early London session, USD/JPY is trading near 144.20 while EUR/USD is around 1.0920. Both pairs have retraced the dollar’s strength seen in the Tokyo market. Dollar buying has been supported by the rise in US Treasury yields. As the yield on the 10-year Treasury note climbed from around 3.71% to 3.75%, USD/JPY rose from the lower to the upper 144 yen range and reached a high of around 144.70 during the London morning session, marking a new high for the year. However, as the pair approached the key level of 145 yen, which was closely watched during last year’s yen-buying intervention, it quickly reversed and dropped to 144.17. The subsequent recovery failed to reach the 144.50 level, erasing the dollar buying momentum from the Tokyo market. However, it did not reach the low of 144.14 set in the morning session and continues to trade in the 144 yen range. Following the sharp decline in USD/JPY, Finance Minister Suzuki’s customary comments against yen appreciation were reported.
EUR/USD experienced a decline from around 1.0920 to 1.0881 in the Tokyo market, but the downward pressure eased in the afternoon. During the early London session, it showed a rebound and briefly reached a new daily high around 1.0922. Since then, it has held at levels around 1.0910-1.0920. Today, the release of Germany’s Consumer Price Index (CPI) is awaited, and the preliminary figures from various states, which showed an acceleration in inflation from the previous report, have triggered buying in the euro. The Spanish Consumer Price Index also exceeded market expectations, further supporting the euro.
Today, USD/JPY experienced a sharp decline, and with Finance Minister Suzuki’s customary comments against yen appreciation, caution was already present around the 144 yen level. Overall, there is a general trend of yen buying.
JPY and EUR are seen as buys.
The direction of EUR will be influenced by the release of Germany’s Consumer Price Index (CPI).