The Yen is climbing to record highs after Kuroda was elected governor of the central bank
After Kuroda was nominated for a second term as the Bank of Japan Governor, the USDJPY dropped as low as 105.55 as the Japanese stocks remained high. The S&P futures were modestly firmer as most Asian markets were closed for the Lunar New Year Holidays.
The Bloomberg Dollar Index declined for the sixth straight day as the euro continues to rise to its highest level since November 2014. WTI crude was near $61.70 before dropping towards $61.30.
The Key Headlines of the Asian Session:
- In Japan, Haruhiko Kuroda has been nominated for a second term as the Bank of Japan Governor, while Amamiya and Wakatabe have been nominated for Deputy Governors.
- Japanese Finance Ministers Aso went on the wire saying that there is no change to the government stance in which it will act on FX should the situation call for it.
- Reappointed Bank of Japan Kuroda says that the BOJ will persist with the powerful easing and to talks about an exit strategy is far too early.
- China holdings of U.S. debt rose un 2017 by most in seven years, as the country continued to be the U.S.’s biggest creditor.
- Reserve Bank of Australia Governor Lowe says that there is no strong case for a near-term rate hike.
- The New Zealand January Manufacturing PMI came in at 55.6 vs 51.1 from December.
The European market takes over the Asian Session as investors during that period were sitting around twiddling their thumbs since liquidity was low due to the Lunar Holiday. The economic calendar for the European Session looks to be focused on the British once again as the Retail Sales are expected to rise after last month’s drop. This will be the highlight of the European session as nothing else is expected to happen during the session.
The yen advanced past 106.00 against the dollar to reach a fresh 15-month high, as markets shrugged off the widely-expected nomination of Haruhiko Kuroda for another term as the Bank of Japan Governor. Bloomberg Dollar Spot Index drops for a sixth day to another 4-year low in thin trading with many Asian markets closed for the Lunar New Year. Japan’s Nikkei average rises.
USDJPY – The pair may test the 105.72 at the 200-Month Moving Average Support. At the moment, the pair is seeing resistance the 107.02 (Feb 15 high) and support at 105.53 (Oct 28, 2016, high)
EURUSD – The pair is setting up to test the January highs after a very bullish close. The pair is seeing resistance at the 1.2570 (Dec. 2014 high) and support at 1.2206 (Feb. 9 high).
EURJPY – The Yuppy has a strong chance of testing the 200-DMA dynamic support before the end of the month. Currently, resistance is seen at 134.17 (Feb 9 high) while support at 131.17 (Nov. 20 Low).
USDZAR – The pair continued its downward movement and reached 11.5552 and it's expected to reach more down level according to the strength of the Rand.