JPY Claus back losses

Market reports
Thanim Islam
  • BoJ officials in no rush to raise rates
  • UK wages decelerate at fastest pace in 2 years
  • US inflation due today

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USD had a late surge in the afternoon in what was otherwise a lacklustre trading ahead day. US treasury yields continued to climb ahead of today's inflation number. JPY weakened off after reports that BoJ officials stated that they see little need to amend monetary policy later this month. GBPEUR managed to claw out a fresh 3-month high as well.


Market rates

* Daily move - against G10 rates at 7:30am, 12.12.23

** Indicative rates - interbank rates at 7:30am, 12.12.23

Table (35)-1

Data points

Table (38)


  • None today.

Our thoughts

UK wages slowed more than expected this morning, with the unemployment rate remaining at 4.2%, indicating the job market may well be slowing amidst a gloomy growth outlook. GBP is slightly lower on the numbers as we wait to hear what the BoE has to say on Thursday, with regards to the future interest rate outlook. Market pricing on rate cuts next year by the BoE is still far less than what markets are pricing by the Fed and ECB next year.

All about those inflation numbers out of the US this afternoon, and whether last month's rate cut pricing was correct by traders over the last month of November, OR those bets were far too excessive. Expected numbers are mixed as above but it will be that core number that will be closely looked at. A higher core number and expect further scaling back on rate cuts by the Fed, treasury yields to climb, and USD to continue its recovery.

Chart of the day

Speculation mounted last week that we could see policy action by the BoJ to raise interest rates out of negative territory, causing JPY to gain last week. However, reports yesterday suggested that BoJ officials see little need to take action as early as next week's meeting, causing JPY to give up some of its gains from last week.

12122023 cotd
Source: Bloomberg Finance L.P.

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