MNI: FRANCE FEB MANUF SENTIMENT AT 100
- MNI: FRANCE FEB MANUF SENTIMENT AT 100
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USD: In the red across G10s
- The Dollar is in the red across G10s, and despite the largest moves noted in the Yen, as BoJ UEDA seems to be leaning on the Hawkish side, the Kiwi and the Aussie are the best performers.
- USDJPY has so far found some support just short of 146.93, the 23.6% retracement of this Year's rally, now some 50 pips off the low.
- AUD is up half a percent with the Kiwi in early trade, but AUDUSD hasn't managed to break 0.6614, Yesterday's high, printed a 0.6612 high today.
- Note that there's 6.64bn worth of option between 0.6565/0.6630 for Wednesday's expiry, up from 5.99bn last week.
BOJ: A Reminder Of Our Policy Team's Thinking
Against this market backdrop/in the wake of comments from BoJ Governor Ueda it is worth highlighting our Tokyo policy team’s latest insight piece, in which they flagged their understanding that “the Bank of Japan's board remains divided over whether sufficient evidence of sustainable wage inflation exists to justify a move away from negative rates, meaning Governor Kazuo Ueda's opinion will carry more weight, though officials still hope to achieve consensus.” Our Tokyo team has previously suggested that the Bank could end its negative rates policy in April,
JPY: Bid Limited By Y147.00 Area In USD/JPY
The initial JPY bid runs out of steam as USD/JPY bears fail to force a meaningful break through Y147.00 (lows of Y146.99). BoJ Governor Ueda has noted that the Bank will have more data available come the April meeting (vs. March), which suggests that a policy tweak will not come at the next meeting. Still, he went on to note that the Bank could alter policy settings even if real wages are in negative territory, while he also highlighted that the Bank doesn’t need the results of wage negotiations for all small firms to make a decision re: policy tweaks as projections can be made for some of the smaller names, alongside a higher degree of uncertainty re: wage discussions. Ueda also stressed the need to be able to guide monetary policy whatever the political backdrop is in Japan.
- Modestly hawkish utterances from the BoJ Governor thus far, as opposed to a commitment to an imminent policy tweak.
- Short JPY positioning established in early ’24 will have further helped the move lower in XXX/JPY pairs.
