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☆ Analysis: Yen comeback may be a longer waiting game
▼ + stars: | 2023-10-27 | by ( Tom Westbrook | ) www.reuters.com time to read: +5 min

One result is an uneasy calm in spot and options markets for dollar/yen as traders give up waiting for the yen to bounce. Driven weaker by the widening gap between U.S. and Japanese interest rates, the yen has lost 13% on the dollar this year and at 150 is near the three-decade low of 151.94 that prompted government intervention a year ago. Market participants say what's changed is the expectation that Japan would be in the driver's seat for the yen this year. Yet together with the risk of intervention, it only seems to have stopped the yen from falling, rather than driving the sort of rally investors had been girding for at the outset of 2023. To be sure, Sachdev said interest in 'carry trades' - borrowing yen to sell for higher-interest paying currencies is waning, while investors have been keen for long exposure to yen assets.

Persons: Kim Kyung, Patrick Law, Masafumi Yamamoto, Yen, Shafali Sachdev, Sachdev, Tom Westbrook, Jacqueline Wong Organizations: National Printing Bureau, Bank of Japan, REUTERS, Rights, Federal, Pacific FX, Bank of America, Bank of International Settlements, Bank of, Mizuho Securities, U.S ., Swiss, Reuters, BNP, Wealth Management, Citi, Thomson Locations: Tokyo, Japan, Rights SINGAPORE, Asia, Pacific, Hong Kong, U.S

With inflation accelerating, Ueda could finally set Japan on a path to raise rates after the BOJ spent a decade fighting deflation risks with its unorthodox bond buying scheme costing trillions of yen. Ueda himself on Friday said current policy settings were appropriate, which also put a bit of a dampener on expectations of any shift. Implied volatility has also eased in the forex options market, suggesting an ebbing in bets on big shifts in the yen exchange rate. "It's not very apparent that (Ueda) would take on the job and then immediately change the policy." To be sure, 10-year Japanese yields were untraded at the BOJ's ceiling on Monday, indicating plenty of investors are staying short.

☆ Recessions risks knock stocks, speculators drawn back to yen
▼ + stars: | 2023-01-19 | by ( Tom Westbrook | ) www.reuters.com time to read: +3 min

The Nikkei dip and the bounce for the yen suggest such speculation is here to stay, at least for now. April was another possibility, she added, since by then the BOJ would have a new governor. "My guess would be that more speculators would look to build positions going into these meetings." Microsoft's announcement of 10,000 layoffs and hawkish comments from Cleveland Fed President Loretta Mester and St. Louis Fed President James Bullard added to the gloom, with both Fed officials expecting U.S. interest rates above 5% this year. The Australian dollar was last down 0.5% at $0.6907, losing ground after data showed an unexpected fall in Australian employment last month.

☆ Reactions: Britain's pound crumbles to record lows in firesale of UK assets
▼ + stars: | 2022-09-26 | by ( ) www.reuters.com time to read: +8 min

Wads of British Pound Sterling banknotes are stacked in piles at the Money Service Austria company's headquarters in Vienna, Austria, November 16, 2017. REUTERS/Leonhard Foeger/File PhotoLONDON, Sept 26 (Reuters) - Britain's pound plunged to record lows on Monday and bonds were slammed for a second day, as investors punished UK assets after the government's mini-budget announcement last week. The presentation of the mini-budget was received quite badly by the markets – sterling literally collapsed. The significant tax cuts announced by the Treasury Secretary cause concerns for the currency markets because of rising government debt." One is the loss of confidence in UK fiscal policy and that won't help sterling.

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