Intraday Market Thoughts

USD/JPY Hit 95.00 , Onto Chinese Trade Data

by Adam Button
Mar 8, 2013 0:33

USD/JPY broke through 95.00 to the highest level since 2009. The euro was the top performer following Draghi's upbeat press conference. Chinese trade balance is the highlight in Asia. Both EURUSD longs from Feb 25 are nearing their target. The details of these trades alongside GBPUSD are found in the Latest Premium Insights. Yen pairs will be updated 60-90 mins before the NFP.

USD/JPY stole the show on Thursday as it continued a three-day, 200+ pip rally. The big news is that it broke above 95.00 which is an important psychological, and more importantly, technical level. The high in 2010 was 94.99 and by breaking that level, it opens the way for a test of 100.

The euro ended Thursday with its largest gain since early January. The takeaway from Draghi's press conference was the upbeat tone. Growth and inflation were downgraded and the door was left open for rate cuts but, overall, Draghi was encouraged about a gradual pickup in growth in the second half and he was pleased that bond-market worries due to the Italian election didn't spread beyond BTPs.

It could be a bluff from Draghi in an effort to boost confidence but he sounded genuine and in no hurry to cut rates.

Early in Asia-Pacific trading Japan released final revisions to fourth quarter GDP. The changes are pushed Q4 GDP to +0.2% from -0.4%. The change from negative to positive is important– at least psychologically.

The bigger number was the massive 1.5 trillion yen trade deficit announced for January, which breaks the record set in January 2012. Japan is traditionally an export nation and the deficit underscores the need for a weaker yen.

Later, at 0200 GMT, China releases trade data. The deficit/surplus is less important than the overall pace of trade. Imports are expected to fall 8.5% year-over-year while exports are expected to grow 8.1%.

Act Exp Prev GMT
Trade Balance (JAN)
$-44.45B $-43.00B $-38.14B Mar 07 13:30
Trade Balance - BOP Basis (JPY) (JAN)
-¥1479.3B -¥1512.3B -¥567.6B Mar 07 23:50
Nonfarm Payrolls (FEB)
160K 157K Mar 08 13:30
GDP Annualized (Q4)
0.2% -3.8% Mar 07 23:50
GDP (Q4) (q/q)
0% -1% Mar 07 23:50
GDP Deflator (Q4) (y/y)
-0.7% -0.6% Mar 07 23:50

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