Yen Falls on Dovish BoJ, Risk-On Sentiment Boosts Market
| Action Insight Daily Report 4-28-23 |
Yen Falls on Dovish BoJ, Risk-On Sentiment Boosts Market |
Yen declined broadly in Asian session as traders discovered that BoJ still has the potential to surprise the market with dovish moves. The selloff was triggered by the central bank's plan to review monetary policy in 12 to 18 months, a major disappointment for those who expected imminent changes as early as at today's meeting. Additionally, BoJ projects that core inflation will not sustain above target within the projection horizon. Risk-on sentiment, following the strong rebound in US stocks overnight, is another factor pressuring Yen. With the BoJ risk now cleared, bears should be feeling free to act. At the moment, Australian dollar remains the worst performer for the week, as more analysts anticipate another RBA pause next week. Canadian dollar is the second worst, followed by The Sterling is the best performer, trailed by Euro and New Zealand dollar. While Dollar is recovering today, it remains mixed for the week. The overall picture may change, as Eurozone GDP, Canada GDP, and US PCE inflation data are set to be released today. Technically, USD/JPY will be a focus in the next few hours, at least before US session. Break of 135.13 will resume the choppy rebound from 129.62. Attention will be on the reaction to the near-term channel resistance (now at around 136.10). Rejection by this resistance will likely keep the rebound corrective and favor a larger decline through 129.62 and 127.20 at a later stage. However, a strong break of the channel resistance will indicate upside acceleration and increase the likelihood of resuming the entire rise from 127.20 through 137.90 resistance. In Asia, at the time of writing, Nikkei is up 0.80%. Hong Kong HSI is up 0.87%. China Shanghai SSE is up 0.67. Singapore Strait Times is down -0.21%. Japan 10-year JGB yield is down notably by -0.032 at 0.428. Overnight, DOW rose 1.57%. S&P 500 rose 1.96%. NASDAQ rose 2.43%. 10-year yield rose 0.096 to 3.528. |
GBP/JPY Daily Outlook Daily Pivots: (S1) 166.66; (P) 167.09; (R1) 167.85; More... GBP/JPY's rally resumed by breaking through 167.95 resistance an intraday bias is back on the upside. Current rise from 155.33 should target 169.26 resistance first, and then 172.11 high. For now, near term outlook will remain cautiously bullish as long as 165.40 support holds, in case of retreat. However, firm break of 165.40 will argue that the corrective pattern from 172.11 is starting another falling leg. Intraday bias will be back on the downside for 162.75 support and below. | |
| GMT | Ccy | Events | Actual | Forecast | Previous | Revised |
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| 23:30 | JPY | Tokyo CPI Core Y/Y Apr | 3.50% | 3.20% | 3.20% | | 23:50 | JPY | Industrial Production M/M Mar P | 0.80% | 0.40% | 4.60% | | 23:50 | JPY | Retail Trade Y/Y Mar | 7.20% | 6.50% | 6.60% | 7.30% | | 23:30 | JPY | Unemployment Rate Mar | 2.80% | 2.50% | 2.60% | | 01:30 | AUD | Private Sector Credit M/M Mar | 0.30% | 0.30% | 0.30% | | 01:30 | AUD | PPI Q/Q Q1 | 1.00% | 1.50% | 0.70% | | 01:30 | AUD | PPI Y/Y Q1 | 5.20% | 5.80% | 5.80% | | 04:00 | JPY | BoJ Interest Rate Decision | -0.10% | -0.10% | -0.10% | | 05:00 | JPY | Housing Starts Y/Y Mar | -3.2% | -3.70% | -0.30% | | 05:30 | EUR | France GDP Q/Q Q1 P | 0.10% | 0.10% | | 06:00 | EUR | Germany Import Price Index M/M Mar | -0.90% | -2.40% | | 06:30 | CHF | Real Retail Sales Y/Y Mar | 0.40% | 0.30% | | 07:00 | CHF | KOF Leading Indicator Apr | 98 | 98.2 | | 07:55 | EUR | Germany Unemployment Change Mar | 10K | 16K | | 07:55 | EUR | Germany Unemployment Rate Mar | 5.60% | 5.60% | | 08:00 | EUR | Italy GDP Q/Q Q1 P | 0.20% | -0.10% | | 08:00 | EUR | Germany GDP Q/Q Q1 P | 0.10% | -0.40% | | 09:00 | EUR | Eurozone GDP Q/Q Q1 P | 0.10% | 0.00% | | 12:00 | EUR | Germany CPI M/M Apr P | 0.60% | 0.80% | | 12:00 | EUR | Germany CPI Y/Y Apr P | 7.30% | 7.40% | | 12:30 | CAD | GDP M/M Feb | 0.20% | 0.50% | | 12:30 | USD | Personal Income M/M Mar | 0.20% | 0.30% | | 12:30 | USD | Personal Spending Mar | -0.10% | 0.20% | | 12:30 | USD | PCE Price Index M/M Mar | 0.30% | 0.30% | | 12:30 | USD | PCE Price Index Y/Y Mar | 4.60% | 5.00% | | 12:30 | USD | Core PCE Price Index M/M Mar | 0.30% | 0.30% | | 12:30 | USD | Core PCE Price Index Y/Y Mar | 4.50% | 4.60% | | 12:30 | USD | Employment Cost Index Q1 | 1.10% | 1.00% | | 13:45 | USD | Chicago PMI Apr | 43.7 | 43.8 | | 14:00 | USD | Michigan Consumer Sentiment Index Apr F | 63.5 | 63.5 |
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