USD/JPY Fails To Gain Any Sustained Direction

EUR/USD

With a distinct lack of tier 1 data from the Eurozone and both the UK and US away from market, today’s trade was a relatively subdued affair, although did see the pair trade in minor positive territory after a technical break back above the 200DMA which was previously crossed below on Friday. In terms of economic commentary markets were provided with further insight into the future path of ECB policy by comments from ECB’s Coeure who over the weekend said the ECB may adopt negative deposit rates, but also added that it is too early to say exactly what the ECB will do at its June meeting, however this failed to provide the pair with any direction. Next up on the speaker slate was Draghi who revealed the ECB must be particularly alert to negative price spiral and the ECB could offer LTROs and buy ABS, whilst inflation expectations may need QE but once again the pair proved to be resilient to the central bank rhetoric and traded in a relatively rangebound manner for the remainder of the session. Looking ahead, the key focus for the pair will likely be placed upon the host of tier 1 data from the US including the second GDP reading as well as the jobs report out of Germany.

USD/JPY

With relatively light newsflow, the pair failed to gain any sustained direction throughout the session and finished the day in modest negative territory. Overnight, the USD/JPY did move below 102.00 after briefly breaking above the level to post a session high at 102.05 (May 15th levels) amid Japanese exporter related selling. However, the main focus for the Asia-Pacific session was the release of the BoJ minutes which were largely a non-event but one source of focus came from an outside view held by Board Member Sato proposed changing assessment to show risks to prices are somewhat tilted to the downside. Looking ahead for the pair, this week does see the release of Japanese CPI but more focus for the pair may be obtained from events stateside where participants will see a host of tier 1 US data and Fed speakers.