The USD/JPY trade continues to be the currency pair that traders are piling into as the pair nears a 4 ½ year high.
Hard to feel good about the level of move we have seen in Japan relative to itself. Sure, only a 25bp move in the Japanese 10yr JGBs but this is from 0.60% yield to 0.85% yield and it happened in 3 days.
In a topic which could be discussed at great length beyond this forum, I would at least like to sketch the surface of a concept I think many investors (including me) are having trouble with.
The Aussie dollar is off 1.4% over the last 2 days and through key support at 101.80. We have been talking this trade for a few weeks now and from April 11th (eve of the Gold plunge) now -3.5%.
A tug-a-war between the U.S. dollar and Japanese yen that has kept the currency pair in tight range this week has the yen pulling ahead into the weekend.
Last night’s macro in a word is terrible. China PMI and German manufacturing offer no relief for commodities and they are linked.