The USDJPY (and other JPY cross currency pairs) traded to the highest level since December 2015. The move today took the price above the 121.00 and 122.00 level to a high of 122.399. Technically, the January 2016 high at 121.68 was also broken with other swing high and swing low levels going back to 2014 at 122.019 (see red numbered circles on the chart below). The pair is up 13 of 14 days. Since the March 4 low, the price is up 776 pips from 114.64 low or 6.76%.
Looking at other JPY crosses:
- The GBPJPY moved to the highest level since end of May 2016, and moved above the 50% of the move down from the 2015 high at 159.918. The price trades at 161.25
- The EURJPY rose to the highest level since February 2018, taking out the 2021 high at 134.11. The price trades at 134.51
- The AUDJPY trades at the highest level since August 2015 after extending above the September 2017 high at 90.29 and the December 2015 high at 90.695. The price trades at 91.892.
- The CADJPY trades at 97.664 which is the highest level since the end of June 2015. The pair has been up 12 days in a row, and is up 809 pips or 9.02% over those 12 days.
- The CHFJPY is trading at the highest level since end of June 2015 at 131.44. The price is up 10 of 12 days. The price is up 720 pips or 5.8% from the March 7 low at 124.24.
The main catalysts for the run higher is the yield spreads vs the JPY rates. The BOJ is not looking to raise rates, while others yields, are see bigger moves to the upside. Also the stock markets are rebounding which is pushing money out of the “relative safety of the JPY” (JPY moves lower).
Looking at the strongest to weakest, the AUD and CAD are the strongest and the JPY is the runaway weakest of the majors (by far). All the major currencies moved 0.88% to 1.24% vs the JPY (JPY weaker). The USDJPY moved up by 1.03% on the day.
In the US stock market today, the major indices rose sharply. The S&P and Nasdaq both recovered the declines from yesterday (lost 1.2% to 1.3% yesterday). The Dow recovered most of it’s declines.
The final numbers are showing:
- Dow industrial average rose 349.44 points or 1.02% at 34707.95
- S&P index rose 63.94 points or 1.43% at 4520.17
- NASDAQ index rose 269.24 points or 1.93% at 14191.85
- Russell 2000 increased 23.23 points or 1.13% at 2075.44
In the US debt market, yields move higher after yesterday’s declines. The 10 year was up around 5 basis points as was the 5 year.
In other markets:
- Gold is up $15.40 or 0.8% at $1957.65
- WTI crude oil fell today with the contract settling at $112.34. The current price is trading at $111.20 in after-hours trading.
- Bitcoin moved higher and is trading at $43,888.55. The price moved away from its 100 day moving average of $42,156.69.
The economic calendar that today saw initial jobs claims and continuing claims falling to the lowest level since 1969. Jobs are not the problem but employment is a lagging indicator. Nevertheless, the employment picture is very strong.
Durable goods came in weaker than expected. This data series can be quite volatile. The data will be revised in a few weeks with the factory orders report.
The preliminary Markit PMI manufacturing report came in stronger than expected which is a more timely indication of the economy. It along with the initial jobs claims suggests that the economy is not falling over as a result of the Ukraine war and the rise in crude oil prices/commodity prices/Fed hike expectations at least for the time being.