gold struggles to shine 1788672015
<p>NZDJPY peaked just above 94.00 at the end of 2014, before plummeting in January and again in June. The totality of the sell-off was almost […]</p>
Share this:
NZDJPY peaked just above 94.00 at the end of 2014, before plummeting in January and again in June. The totality of the sell-off was almost 1,400 at its lowest point, despite gains in USDJPY. It was a widespread and a brutal sell-off in the kiwi that derailed the pair, with the commodity currency coming under assault from weaker commodity prices, soft risk appetite and a deteriorating outlook for interest rates.
Bears don’t appear to have finished feasting on the kiwi just yet, as evidenced by a very soft business confidence index for NZ today, and now the yen is starting to look a little more comfortable pushing higher than it has in the past. Policy setters in Japan appear to becoming more uncomfortable with the negative impacts of excessive policy loosening and yen weakness and Japanese economic data may be turning a corner.
Industrial production in Japan jumped an impressive 0.8% m/m in June and inflation is not as bad as once feared, with core CPI rising 0.1% y/y last month (expected 0.0%). It’s still very early days in Japan and we aren’t ruling out the prospect of further stimulus from the BoJ, but there’s at least a glimpse of light on the horizon for the economy, however dim. This was reflected by a jump in the yen on the back of today’s inflation figures, with USDJPY briefly shooting below 124.00
In New Zealand, ANZ’s Business Confidence Index dropped to -15.3 this month, representing an astounding deterioration of corporate sentiment. This is the lowest the index has been in over six years and the first time it has been in contraction territory twice in a row since the GFC. Unsurprisingly, the kiwi didn’t react very well to this news, with NZDUSD dropping through 0.6600 before finding some support around 0.6570.
Technical look: NZD/JPY
NZDJPY’s recent push upwards looks more like a consolidation than the beginning of a more substantial push higher. At present, the pair is testing the bottom of this channel, a break of which could see the pair make another run at support around 80.50. On the up side, we’re keeping an eye on the top of its wedge formation and then a key sticky zone for price around 85.00.
Related tags:
Latest market news
Open an account in minutes
Experience award-winning platforms with fast and secure execution, and enjoy tight spreads from 0.5 pts on FX and 0.3 pts on indices.
Economic calendar
Web Trader platform
Our sophisticated web-based platform is packed with features.
Related articles
This report is intended for general circulation only. It should not be construed as a recommendation, or an offer (or solicitation of an offer) to buy or sell any financial products. The information provided does not take into account your specific investment objectives, financial situation or particular needs. Before you act on any recommendation that may be contained in this report, independent advice ought to be sought from a financial adviser regarding the suitability of the investment product, taking into account your specific investment objectives, financial situation or particular needs.
StoneX Financial Pte. Ltd., may distribute reports produced by its respective foreign entities or affiliates within the StoneX group of companies or third parties pursuant to an arrangement under Regulation 32C of the Financial Advisers Regulations. Where the report is distributed to a person in Singapore who is not an accredited investor, expert investor or an institutional investor (as defined in the Securities Futures Act), StoneX Financial Pte. Ltd. accepts legal responsibility to such persons for the contents of the report only to the extent required by law. Singapore recipients should contact StoneX Financial Pte. Ltd. at 6826 9988 for matters arising from, or in connection with the report.
In the case of all other recipients of this report, to the extent permitted by applicable laws and regulations neither StoneX Financial Pte. Ltd. nor its associated companies will be responsible or liable for any loss or damage incurred arising out of, or in connection with, any use of the information contained in this report and all such liability is hereby expressly disclaimed. No representation or warranty is made, express or implied, that the content of this report is complete or accurate.
StoneX Financial Pte. Ltd. is not under any obligation to update this report.
Trading CFDs carries a high level of risk that may not be suitable for some investors. Consider your investment objectives, level of experience, financial resources, risk appetite and other relevant circumstances carefully. The possibility exists that you could lose some or all of your investments, including your initial deposits. If in doubt, please seek independent expert advice. Visit www.forex.com/en-sg/terms-and-policies for the complete Risk Disclosure Statement.