Yen in focus
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Daily Forex Market Report 16-Jan-2023: Yen in focus, USD and GBP volumes dip
The Japanese yen is in the spotlight in anticipation of Wednesday’s central bank meeting.
Having made indications of monetary policy tightening at the December meeting after a multi-decade hands-off approach, investors are pondering whether the Bank of Japan (BoJ) will again let its bond market peg go higher.
Citibank strategist Ebrahim Rahbari called another policy change “likely” despite sellers testing the Bank of Japan’s mettle by pushing yields up in December.
The yen surged against the greenback at the end of last week but has since calmed down; though USD/JPY remains near nine-month lows of 128.04.
Volatility has been low across the other majors, mainly due to the closed US markets for Martin Luther King Day. GBP/USD remains ranged between 1.22 and 1.23, while EUR/USD is changing hands at 1.083, having closed fewer than 10 pips lower on Sunday.
Cable falls back on GDP contraction – Source: capital.com
With the World Economic Forum shindig kicking off in Davos today, the world’s financial elite likely have Après-Ski on their minds too.
Price action could pick up in the following two days for Cable, given tomorrow’s UK employment data read and Wednesday’s UK year-on-year inflation rate, which is still expected to remain in the double digits.
EUR/GBP has remained pinned to 88.55p since closing 0.4% lower on Friday.
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