USD/JPY Jumps to 24-Year High

 Yen weakness and the crisis in the UK gilts market remain the major focus of the Forex market today, with a strong US Dollar as background.

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1. Markets are dominated today by action in the Forex sector. The USD/JPY currency pair made a bullish breakout above ¥146 on large volume without any sign of intervention by the Bank of Japan, suggesting it is a real breakout likely to drive the price considerably higher if the Bank does not intervene. The last time the price of this currency pair got near ¥146 the Bank of Japan successfully intervened to drive the price considerably lower, but it has been steadily trending higher ever since, suggesting the Bank will find it difficult to permanently suppress the price if it wishes to. The Bank may begin to intervene at any moment.
2. The AUD/USD currency pair briefly traded at a new 2-year low a few hours ago.
3. There has been some drama at the Bank of England, as the Pound weakened after the Governor asserted its supportive gilt purchase program would end later this week, then just hours later the Financial Times reported that the Bank was quietly briefing markets that it will prolong its gilt purchases beyond this week, contradicting the Governor. The GBP/USD currency pair spiked higher following the report of this story, but it is not clear that it will be enough to halt the Pound’s slide for more than a few hours.
4. Stock markets remain generally weak, with the S&P 500 Index briefly trading at a new 2.5-year low not seen since the coronavirus panic of 2020. The weakest major stock index is the Hang Seng Index which is continuing to fall with strong bearish momentum to the lowest prices seen since 2011.
5. There will be a release today of the FOMC Meeting Minutes, which will be keenly observed for clues about the Fed’s recent thinking.
6. There will be a release today of UK GDP data, which is expected to show neither growth nor contraction over the past month.
7. There will be a release today of US PPI data.
8. Daily new coronavirus cases globally rose last week for the first time since July, although the overall number is relatively low.
9. It is estimated that 68.2% of the world’s population has received at least one dose of a coronavirus vaccination, while approximately 7.9% of the global population is confirmed to have contracted the virus at some time, although the true number is highly likely to be much larger.  
10. Total confirmed new coronavirus cases worldwide stand at over 627.6 million with an average case fatality rate of 1.05%.  
11. The rate of new coronavirus infections appears to now be significantly increasing only in Austria, Finland, Germany, Italy, Liechtenstein, Singapore, and Taiwan.