Today is a public holiday for the Summer Bank Holiday in the UK. With the busiest London market effectively closed, there is a somewhat cautious mood prevailing.
USD/JPY rose to approach 146.61 yen in the Tokyo morning session, near last week’s high, but has since experienced some corrective movements. The decline in the yield of the US 10-year Treasury bonds has acted as a weight on the dollar. Although the trend still leans towards dollar strength, there is a possibility that a corrective mood will temporarily take over.
In the Tokyo market, Australian dollar (AUD/USD) and New Zealand dollar (NZD/USD) received buying support due to the substantial gains in mainland China and Hong Kong stocks following China’s government reduction of stamp duty. While both AUD/USD and NZD/USD have been trading in the high range, the momentum for further upward attempts has subsided. The Shanghai Composite Index, which began around 3219 points with an over 5% increase from the previous day, declined to nearly 3100 points, causing the gains to slow down to the 1% range. Amidst this, buying activity in AUD and NZD also cooled down. The further developments in the Chinese and commodity markets will be observed.
Today’s market seems to be adopting a cautious approach. However, starting tomorrow and continuing until the weekend, a series of US economic indicators are expected to be released, potentially leading to higher volatility in the market.
