Dominant Currency Sentiment - JPY loses momentum
The market focus remains on JPY and the possibility of intervention by Japanese financial authorities. However, European market participants appear more sceptical.
Indeed, ING analysts note: "Never say never. They have been stepping up the rhetoric lately. But I would be cautious about the inevitability of their intervening. Japan is a signatory to the G20 and they have got policies about not intervening."
Similarly, the Norinchukin Research Institute's chief economist argues: "My feeling is that the MOF won't intervene at this stage and will leave it at verbal warnings. There's still a week before the Fed's rate-setting meeting. I don't think markets believe the ministry will intervene at current dollar/yen levels."
Given the more sceptical stance market participants are now taking, JPY remains firmer on the day but has since lost the majority of its earlier momentum.
Looking ahead, today's US economic calendar is light on tier one data, keeping the market's focus tilted towards JPY and the possibility of intervention, alongside broader themes such as the prevailing risk tone.
Focus will then shift towards economic data in the following Asia-Pacific session, with the release of New Zealand GDP and Australian employment.
Indeed, ING analysts note: "Never say never. They have been stepping up the rhetoric lately. But I would be cautious about the inevitability of their intervening. Japan is a signatory to the G20 and they have got policies about not intervening."
Similarly, the Norinchukin Research Institute's chief economist argues: "My feeling is that the MOF won't intervene at this stage and will leave it at verbal warnings. There's still a week before the Fed's rate-setting meeting. I don't think markets believe the ministry will intervene at current dollar/yen levels."
Given the more sceptical stance market participants are now taking, JPY remains firmer on the day but has since lost the majority of its earlier momentum.
Looking ahead, today's US economic calendar is light on tier one data, keeping the market's focus tilted towards JPY and the possibility of intervention, alongside broader themes such as the prevailing risk tone.
Focus will then shift towards economic data in the following Asia-Pacific session, with the release of New Zealand GDP and Australian employment.
