USD/JPY At One-Year Lows As Risk Aversion Continues

Today’s Economic events

• Japan M2 money stock y/y 3.20% vs. 3.10%
• Australia NAB business confidence 2 vs. 2 previously
• Japan prelim machine tool orders y/y -17.2% vs. -25.7%
• Germany industrial production m/m -1.20% vs. 0.20%
• Germany trade balance 19.4bn vs. 19.4bn
• MPC Member Cunliffe speech
• UK trade balance -9.9bn vs. -10.4bn

Coming up

• JOLTS Job openings
• Wholesale inventories m/m

The markets in Asia saw the equities falling sharply with the benchmark Nikkei225 closing -5.40% lower as Japan's 10 year bond yields fell below 0% for the first time after the BoJ surprised with negative rates in late January. With the weak Nikkei225, the Yen continued to surge ahead higher. USD/JPY is posting losses for another day, down -0.83% for the day. Prices, however, remain above the intraday lows posted just under 114.5.

The commodity risk currencies also fell sharply today. AUD/USD is down -1.40% for the day, trading at 0.698, marking a 10-day low in prices, while NZD/USD is down by a modest -0.79% for the day, trading at 0.657. Despite the lack of any economic data, the markets continued to trade in a risk aversion mode with the Yen surging while the commodity risk currencies posted strong losses.

The European trading session started off with German industrial production falling -1.20%, more than expected -0.20%. The Euro was, however, unfazed as EUR/USD is up 0.36% for the day trading near 1.125, the same levels seen last Friday ahead of the NFP release.

The British Pound was, however, weaker in comparison, down -0.14% for the day, as the Cable struggles to hold on above yesterday's lows near 1.4365. GBP/USD briefly posted an intraday high near 1.448 before pulling back lower. Support is seen at 1.43 which could be the next level of interest in GBP/USD. The European equity markets were also under pressure with the German DAX down -1.68% while the London FTSE100 is down -1.11% at the time of writing.

The NY trading session is quiet today with no major market moving events scheduled. USD/CAD is trading flat with -0.07% declines for the day, as prices look to form a ceiling near 1.40 handle. USD/CAD briefly tested session lows above 1.385 before recovering.  The US equity markets are also pointing to a weaker open today with the Dow Jones Industrial Average down -0.76% while the S&P500 futures are down -0.81% ahead of the market open.

On the commodity front, Gold prices remain a bit quiet after yesterday's rally to $1200. At the time of writing, Gold is up 0.58%, as the precious metal pulled back off $1200 to post a session low near $1186.5. However, further upside could be seen on a break above the $1200 barrier.

WTI Crude Oil prices are managing to recover today, down -0.83% currently, with prices trading at $29.86 a barrel, marking a fourth straight day of declines.