CNH: USD/CNY Fixing Dips, Error Term Wider, USD/CNH Steady Near 6.9400

• CHINA PBOC CONDUCTS CNY482.3 BLN VIA 7-DAY REVERSE REPO MON

• CHINA SETS YUAN CENTRAL PARITY AT 7.0331 MON VS 7.0358

The yen strengthened with the release of the BoJ’s December meeting summary of opinions, which suggested that there are likely to be further rate hikes but it is not on a preset course. It noted that negative real rates are putting downward pressure on the yen. USDJPY fell to 156.06 on the release and is currently around 156.30. It was trading around 156.50 before the BoJ publication. The BBDXY USD index is down 0.1%. 

• Today’s USDJPY low held above initial support at 155.29, 18 December low. Any declines are seen as corrective with the trend structure bullish.
• The yen underperformed the rest of the G10 on Friday with USDJPY up 0.5% to 156.58 after it stabilized through the middle part of the week. The pair reached a high of 157.78 on 19 December, holding below the bull trigger at 157.89, on concern of increased Japanese fiscal stimulus given its already elevated debt ratio.
• There appears to be concern on the BoJ board that delaying rate hikes could sustain price pressures. The December opinions showed growing confidence that rate hikes are appropriate to achieve the price target. Economic impacts of tightening will be monitored closely.
• AUDJPY is off the intraday low of 104.80 to be down 0.2% to 104.96 so far today.
• EURJPY fell to 183.81 with the BoJ news but is now -0.1% to 184.10. Initial support is at 182.28 with resistance at 184.92. The pair is in a primary uptrend.