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9 Feb 2016
AUD/JPY getting destroyed, en-route to 80.00
AUD/JPY has accelerated to the downside after falling over 150 pips in the last 3 hours of trading, currently exchanging hands at 80.35 multi-week lows from a NY close at 82.05, with the Nikkei 225 down over 5%.
A sea of red in Asia
The risk aversion conditions seen on Monday have worsened significantly in Asian trade today, with the Nikkei 225 being annihilated by more than 5%, as mentioned, the SP500 futures are down -0.86%, US 30-year bonds have caught a very strong bid, last at 166.31, while the Australian ASX stock index falls by 2.5%.
Yen jawboning? Does it matter?
While there continues to exist risk of BOJ jawboning the Japanese Yen, given the recent disruptive moves in the currency (USD/JPY is down more than 600 pips from the BOJ-led spike high after adopting negative rates), it is unlikely that any intervention will have long-lasting effects to depreciate the currency as conditions stand. If the BOJ has learnt a lesson since the GFC, is that fighting the Yen bull trend in times of strong 'risk off' is only delaying the inevitable resumption of that trend.
AUD/JPY key levels
On the downside, the next key level to pay attention to is 80.30 (lowest of the day and ATR 14 for today), then the psychological 80.00 round number comes into focus, followed by 79.50 and 79.00. On the upside, bounces are expected to be shallow, with mid and round numbers the key areas for sellers to re-engage in short-side business.
A sea of red in Asia
The risk aversion conditions seen on Monday have worsened significantly in Asian trade today, with the Nikkei 225 being annihilated by more than 5%, as mentioned, the SP500 futures are down -0.86%, US 30-year bonds have caught a very strong bid, last at 166.31, while the Australian ASX stock index falls by 2.5%.
Yen jawboning? Does it matter?
While there continues to exist risk of BOJ jawboning the Japanese Yen, given the recent disruptive moves in the currency (USD/JPY is down more than 600 pips from the BOJ-led spike high after adopting negative rates), it is unlikely that any intervention will have long-lasting effects to depreciate the currency as conditions stand. If the BOJ has learnt a lesson since the GFC, is that fighting the Yen bull trend in times of strong 'risk off' is only delaying the inevitable resumption of that trend.
AUD/JPY key levels
On the downside, the next key level to pay attention to is 80.30 (lowest of the day and ATR 14 for today), then the psychological 80.00 round number comes into focus, followed by 79.50 and 79.00. On the upside, bounces are expected to be shallow, with mid and round numbers the key areas for sellers to re-engage in short-side business.