Forex Today: USD/JPY sold-off into Aso’s no Yen intervention, US PPI on tap

Forex today cheered risk-on market environment amid rising Treasury yields and a rally in the Asian stocks. The Antipodeans also benefited from increased risk appetite in early trades, although surrendered partial gains following mixed Aus jobs data and holiday-thinned light trading. The Chinese markets are off on a week-long break, celebrating the Spring festival.

Meanwhile, the Yen emerged the top gainer for the third straight session in Asia this week, prompting the USD/JPY pair to pause its recovery mode, after Japan’s Finance Minister Aso said that ‘no Yen intervention’ is required, in the wake of the recent appreciation.

Among the commodities’ space, oil and gold prices have found some respite from the renewed broad-based US dollar weakness, as the USD-dumping theme resumes amid mixed US macro news and Trump’s fiscal plans.

Main topics in Asia

Australia Full-time employment decreased by 49,800 in January

The seasonally adjusted employment numbers published today by the Australia Bureau of Statistics (ABS) showed the economy added 16,000 jobs in January, beating the forecast of 15,000.

US 10-year yield rises to fresh 4-year high

The combination of rising inflation and fiscal profligacy continues to weigh over US bond prices.

Japan's Aso: 'No comment' on Yen levels

Japanese Finance Minister Taro Aso addressing markets today regarding recent Yen action.

USD/JPY - Aso's comments kill the technical recovery

The technical recovery in the USD/JPY pair fell apart at 106.89 as the Japanese Yen picked up a bid after Japanese Finance Minister Aso played down the need for FX intervention.

Goldman on tax plan - "The odds of a bad outcome have gone up

Goldman Sachs head Lloyd Blankfein told CNN that Donald Trump's $1.5tn tax cut and spending plans could lead to an overheated US economy.

Key Focus ahead

Heading into Europe, we have little of note, in terms of macro news, to be reported, except for the Eurozone trade balance figures. On the other hand, the NA docket remains quite eventful, with a flurry of economic releases from the US, including the PPI, Philly Fed manufacturing index, jobless claims and industrial production. Also, the Canadian ADP Non-farm employment change data will be released alongside the US data dump.  

EUR/USD: Continuing next leg up, looking for 1.2535

The Euro finished Wednesday closing higher against the US Dollar for the third day in a row; EUR/USD is currently trading close 1.2460 ahead of European markets, flat in Asia with China's markets closed for Chinese New Year.

GBP/USD - Bullish outside day, focus on the Yen

The return of the "USD-dumping" theme post-US CPI release pushed GBP/USD above 1.40 yesterday. The price action engulfed previous day's high-low, meaning the GBP/USD created a "bullish outside day candle" yesterday.

US: Expect PPI to have risen by 0.3% m/m in Jan - Barclays

Barclays Research Team is out with its take on today’s US PPI data that will be reported at 1230GMT.

No Love for the Dollar

The US dollar has been a dog for more than a year but the trade on Valentine's Day showed just how unloved it is.