Forex Today – 27/03: Japanese Yen Hits 34-Year Low

The Japanese Yen is in focus in the currency market today after it fell to its lowest rate against the US Dollar in over 3 decades, prompting warnings from Japanese Finance Minister Suzuki which gave the Yen a little strength.

1. The major market news item today is the weakness of the Japanese Yen. As Japanese officials made clear that monetary policy would remain “accommodative”, the Yen fell against all major currencies, most notably against the US Dollar as the USD/JPY currency pair rose to reach its highest price since 1990 just below ¥152. Japanese Finance Minister Suzuki then gave his usual warnings about not “ruling out any steps” with a “high sense of urgency”. This brought the USD/JPY down from almost ¥152 to ¥151.50. Trend traders will still be interested on being long of the USD/JPY and in being short of the Japanese Yen in general.
2. The minor commodity Cocoa continues to dominate the news as it rises again to new all-time highs with volatile gains – yesterday it increased by about 5% to reach $10,000 for the first time. The commodity superfood has almost tripled in value over the last year alone, with many analysts suggesting supply side shortages are at least partly to blame for the meteoric rise. There is more and more demand for Cocoa every year as it is coveted as a key ingredient for chocolate but also as a superfood in its own right. Trend traders will be interested on the long side, although which such high volatility and sharp gains, it could come crashing down at any time, so trend traders must be careful to use a disciplined stop loss if going long. As well as Cocoa futures, there are Cocoa ETNs available which may be more suitable for retail traders and investors.
3. Bitcoin is rising again and trading above $70,000 not far from its recent record high near $74,000, despite crypto funds seeing record outflows last week.
4. Gold is continuing to look quietly bullish and may well test its recent record high over the coming days, although it is still some way off. Trend traders will also be interested in the long side here. However, it does seem to keep getting sold every time it reaches $2200.
5. The earlier release of Australian CPI (inflation) data showed the annualized rate unchanged at 3.4%, when it was expected to rise slightly to 3.5%. The data barely affected the Australian Dollar, but it has sent the Australian stock market higher as it’s a minor dovish surprise.
6. Yesterday’s release of US CB Consumer Confidence data was slightly worse than expected, suggesting consumer demand is slowing which might be good news on interest rates.