Headlines:
- The BOJ has gotten the ball rolling on the Japanese yen
- Japan's Rengō says average wage demands topped 5% for the first time since 1994
- BOJ's Ueda: Possible to exit stimulus measures while striving to achieve 2% price target
- BOJ's Nakagawa: Prospects of sustainably achieving 2% price target gradually heightening
- All eyes are on Lagarde's press conference when it comes to the ECB today
- Germany January industrial orders -11.3% vs -6.0% m/m expected
- UK February Halifax house prices +0.4% vs +1.3% m/m prior
- UK businesses expect output price inflation to decline over the next year - BOE survey
Markets:
- JPY leads, EUR lags on the day
- European equities a little higher; S&P 500 futures up 0.2%
- US 10-year yields down 0.4 bps to 4.100%
- Gold up 0.4% to $2,156.07
- WTI crude down 0.9% to $78.44
- Bitcoin up 0.9% to $67,080
The FX market has finally come alive at long last. The yen is the big mover amid more hawkish BOJ murmurs this week and some optimism regarding the spring wage negotiations. Japan's largest trade union said that average wage demands were above 5% for the first time since 1994 and that got the yen jumping.
USD/JPY was already lower in Asia to 148.60 before tripping further to 147.70 and holding at the lows now, down over 1% on the day. The pair is now testing its 100-day moving average at 147.72.
Amid the drop lower in yields this week, the dollar continues to struggle as well with GBP/USD up 0.2% to 1.2755 and USD/CHF down 0.3% to 0.8795 currently. The euro is more of a passenger as it awaits the ECB meeting decision later, with EUR/USD barely changed near 1.0900 on the day.
The antipodeans are decent movers as risk sentiment also picked up during the session. Equities were more subdued earlier but are now sitting higher as Nvidia looks set to top $900 at the open later. As such, AUD/USD is up 0.6% to just above 0.6600 - its highest level in over a month.
If the ECB plays its cards right, the euro and regional bonds should see minimal reaction later. But let's see if Lagarde has any surprises up her sleeves.
