FOREX: JPY Crosses - JPY Longs Being Challenged
The market will now be concentrating on how long the US plans to be involved and if the conflict will become extended, the upward momentum of US equities seem to be stalling. ESU5 -0.35%, NQU5 -0.45%. With positioning extreme, the JPY has uncharacteristically remained better offered as the move in oil has become the main focus for the market.
- EUR/JPY - Friday night range 167.32 - 168.40, Asia is trading around 168.500. The pair gapped lower in early Asian trading(167.50) reacting to a poor open for risk . The dip though was again very well supported and the pair has already broken Fridays highs as a market caught long JPY is challenged.
- GBP/JPY - Friday night range 195.70 - 196.70, Asia trades around 196.80. Also found good bids on the gap lower this morning and is now attempting to break the multiple tops around 196.50/197.00. A move back above here and the focus will turn to the 200.00 area further challenging the JPY longs.
- NZD/JPY - Friday night range 86.99 - 87.38, Asia is currently dealing 87.20. NZD/JPY continues to see buyers on dips, a sustained break is needed above 88.00 for the market to turn its focus back to the 90.00 area.
- CNH/JPY - Friday night range 20.2210 - 20.3595, Asia is currently trading around 20.4000. Even CNY/JPY is starting to move higher with the broader JPY weakness, a break back above 20.65/70 would potentially get the bears concerned and we might start seeing some more positions unwound.
Fig 1 : GBP/JPY Hourly Chart
Source: MNI - Market News/Bloomberg Finance L.P
Want to read more?
Find more articles and bullets on these widgets:
Historical bullets
JGB TECHS: (M5) Rallies off Lows
- RES 3: 147.74 - High Jan 15 and bull trigger (cont)
- RES 2: 146.53 - High Aug 6
- RES 1: 141.48/142.95 - High May 2 / High Apr 7
- PRICE: 139.40 @ 15:42 GMT May 23
- SUP 1: 138.54 - Low May 22
- SUP 2: 136.57 - 1.382 proj of the Jan 28 - Feb 20 - Feb 26 bear leg
- SUP 3: 134.89 - 2.000 proj of the Jan 28 - Feb 20 - Feb 26 bear leg
JGBs have rallied off recent lows and for now, however a bearish theme remains intact following the reversal that started Apr 7. A continuation lower would signal scope for an extension towards 136.57, a Fibonacci projection. On the upside, a reversal higher would instead refocus attention on 142.95, the Apr 7 high. The first important resistance to watch is 141.48, the May 2 high. A break of this level would be viewed as an early bullish signal.
US FISCAL: Total Tariff Income Jumping In May As New Rates Hit
Treasury reported a record $16.5B in customs/excise taxes on May 22, reflecting the large increase in tariff rates that went into effect in April.
- Today's report is important because it represents the largest tariff collections of the month which are typically on a due date around the 22nd, when most corporate importers make their payments.
- Thursday's one-day collection is a record, and the month has already set a new record. Tariff revenues have totaled $22.3B so far in May, and are came in at $17.4B in April (after averaging $8.1B/month in 2024).
- For the fiscal year as a whole so far, customs duties have totaled just under $93B, per the Treasury Daily Statement.
US FISCAL: Extraordinary Measures Continue To Dissipate Alongside Treasury Cash
Treasury's latest estimate of the size of "extraordinary measures" available to use "in order to prevent the United States from defaulting on its obligations as Congress deliberate[s] on increasing the debt limit" is down to $67B on May 21 (of an available $299B), vs $82B a week earlier.
- The amount hit the 2nd lowest level since the debt limit impasse started, at $46B, on May 20 (the low was $34B on Feb 24).
- With $476B in cash in the Treasury General Account on May 21, that left the total resources available to Treasury at $543B, the least since April 14 - the day before the annual April 15 tax deadline.
- Treasury Sec Bessent warned Congress earlier this month that "there is a reasonable probability that the federal government's cash and extraordinary measures will be exhausted in August while Congress is scheduled to be in recess. Therefore, I respectfully urge Congress to increase or suspend the debt limit by mid-July".
