Yen Rises on Declining Benchmark Yields, Focus Turns to Canadian Job Data

Action Insight Daily Report 4-6-23

Yen Rises on Declining Benchmark Yields, Focus Turns to Canadian Job Data

Yen is extending this week's rebound in Asian session, with help from extended decline in US and European benchmark yields. Investors were showing signs of worries of a sharper slowdown in US economy after much weaker than expected economic data. Dollar is recovering on mild risk aversion too, but remains the worst performer of the week. The US markets will be keenly awaiting tomorrow's non-farm payroll data to adjust their forecasts on the economy, Fed's rate path, and next moves in the markets.

But for today, Canadian employment data will be a focus first. The lift from oil prices this week has so far faded, with WTI crude oil still struggling around 80 handle. As for BoC monetary policies, there is little reason for a piece of data to take the central out of the pause in tightening. Nevertheless, there are still speculations of at least one more hike by BoC this year, which will be heavily data-dependent.

AUD/CAD would be a pair to watch today. Aussie is among the worst performer for the week after RBA's rate pause. Strong job data from Canada could push AUD/CAD through 0.8984 support. The down trend from 0.9545 would then resume and target 61.8% projection of 0.9545 to 0.9043 from 0.9229 at 0.8919. Overall, outlook will stay bearish as long as 0.9127 resistance holds, in case of a rebound.

In Asia, at the time of writing, Nikkei is down -1.35%. Hong Kong HSI is down -0.38%. China Shanghai SSE is down -0.01%. Singapore Strait Times is down -0.66%. Japan 10-year JGB yield is down -0.0053 at 0.464. Overnight, DOW rose 0.24%. S&P 500 dropped -0.25%. NASDAQ dropped -1.07%. 10-year yield dropped -0.050 to 3.287.

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USD/JPY Daily Outlook

Daily Pivots: (S1) 130.70; (P) 131.27; (R1) 131.91; More...

Intraday bias in USD/JPY remains on the downside for 129.62 support. Break there will resume the whole decline form1 37.90 to retest 127.20 low. On the upside, however, above 133.74 resistance will turn bias back to the upside for another rise. Overall, eventual downside break out is expected as long as 137.90 resistance holds.

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EURUSD | USDJPY | GBPUSD | USDCHF | AUDUSD | USDCAD

EURJPY | EURGBP | EURCHF | EURAUD | GBPJPY

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Economic Calendar
GMT Ccy Events Actual Forecast Previous Revised
01:30 AUD Trade Balance (AUD) Feb 13.87B 11.12B 11.69B 11.27B
01:45 CNY Caixin Services PMI Mar 57.8 55 55
05:45 CHF Unemployment Rate Mar 1.90% 1.90% 1.90%
06:00 EUR Germany Industrial Production Feb -0.40% 3.50%
07:00 CHF Foreign Currency Reserves (CHF) Mar 771B
08:30 GBP Construction PMI Mar 53.6 54.6
11:30 USD Challenger Job Cuts Mar 410.10%
12:30 USD Initial Jobless Claims (Mar 31) 200K 198K
12:30 CAD Net Change in Employment Mar 10.2K 21.8K
12:30 CAD Unemployment Rate Mar 5.10% 5.00%
14:00 CAD Ivey PMI Mar 52 51.6
14:30 USD Natural Gas Storage -20B -47B