The Japanese yen continued to post unusually strong gains against other currencies as markets flocked to long yen positions ahead of further rate hikes by the Bank of Japan.
➡️ The Forex market was in focus today as the Japanese Yen continued to post strong gains., as markets adjust to the new, more hawkish policies announced by the Bank of Japan and the prospect of further rate hikes, as the Bank of Japan is now diverging from most major central banks in the opposite direction to that of recent years. However, the hawkish bias triggered the biggest sell-off in Japanese stocks since the 2020 pandemic. The USD/JPY reference currency pair traded at a low of ¥148.50 during today's Tokyo session. The Japanese yen was the strongest major currency during this session, while the Australian dollar was again the weakest.. Day traders will be interested in trading the high volatility of the yen.
➡️ The US Federal Reserve held a policy meeting yesterday where it kept the interest rate on hold as expected. However, The meeting had a dovish impact, as Federal Reserve Chairman Jerome Powell said central bank officials would likely cut interest rates in September unless inflation stops falling., highlighting the risks of further labor market weakness. This had the effect of pushing the greenback and U.S. Treasury yields down to their lowest levels in more than 5 months.
➡️ Crude oil rose unusually high yesterday as the New York Times reported that Iran had decided to attack Israel directly after two high-profile assassinations attributed to Israel earlier in the week., although Israel did not take responsibility for the killing of Hamas leader Ismail Haniyeh in Tehran. Israel took credit for the assassination of Hezbollah's military chief of staff in Beirut. Several airlines are canceling flights to Lebanon and Israel, and the Israeli government has reportedly assessed that there is a high probability of an all-out war between Israel and the Iranian axis.. If this were to happen, we can expect to see dramatic market moves in crude oil and cooler risk-off sentiment in other markets., probably including stock markets. The world is waiting to see the next move of the Iranian axis.
➡️ Stock markets outside Japan are mostly up, after receiving a boost from yesterday's dovish US Federal Reserve meeting.
➡️ The Bank of England will hold a policy meeting today where it is widely expected to cut the interest rate by 0.25% to 5.00%, with analysts expecting around 57% the possibility of a cut. If the cut doesn't happen, it could send the pound soaring.
➡️ Bitcoin fell further yesterday, despite the recovery in global stock markets. This is a bearish signal for Bitcoin.
➡️ Yesterday the gold has seen a strong rise and is once again approaching its recent all-time high.
➡️ Today in the United States, ISM Manufacturing PMI data and Unemployment Claims data will be released.
Credit by DailyForex.com
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