Asian Open

US interest rate expectations are becoming increasingly influential on Japan’s Nikkei 225, both through the FX channel impacting forecasts for exporter earnings and sentiment towards the outlook for global economic growth. Other factors, such as commentary from BOJ, come across as secondary factors for now.

With USD/JPY holding above key support after the daily RSI reached its most oversold level since 1996, the 1-hour bull flag could tempt bulls. The ASX 200 also shows the potential for another leg higher, even if small.

An upside surprise on ISM services helped slow the bleeding on US stock markets and AUD/USD erase heavy losses ahead of todays RBA meeting. Nikkei futures rose 6% after its 12% plunge, which brings hopes for a bounce on the ASX 200 today.

A weak ISM manufacturing report a day after a dovish Fed meeting (and on the eve of NFP) was just the ticket for risk off on Wall Street. GBP traders ignored the BOE's cautious stance on rate cuts.

Wednesday was a day of divergent policies that saw the Bank of Japan (BOJ) hike rates more than expected and the Fed signal a cut. And that saw the US dollar and yen broadly move their separate ways.

This time tomorrow we will have the conclusion of the highly anticipated BOJ and FOMC meetings, with a clearer idea of whether the RBA will be forced into action after today’s quarterly inflation report.

The open to close range of 30 pips over the last three days is not likely to last for USD/JPY, as it heads towards highly anticipated meetings from the FOMC and BOJ.

USD/JPY formed a potential bullish reversal day at key support ahead of today's US inflation report. With decent GDP figures also helping crude oil prices post a decent day's gain.

The post-CPI selloff of the USD has wound down, and price action suggests a bounce cold be due. The ASX has surpassed 8k for the first time on record, and bulls may be keen to seek dips.

It will likely take more than one bearish reversal candle to spoil the bullish trend structure of AUD/USD, and there's plenty of support nearby to excite dip buyers. USD/JPY has likely returned to a shell-socked state after a surge of volatility toppled the pair for a clear break below 160.

The ever-weaker yen allowed USD/JPY to drift higher for a third day, and now trades less than a typical day's range from the 162 handle - a level not tested since 1986. Wall Street indices reached record highs on dovish comments from Jerome Powell's testimony, and that bodes well for the ASX 200 today.

Price action suggests AUD/USD may need to retrace before resuming its anticipated move to 68c. Jerome Powell speaks to the Senate banking committee, which could be a key driver for the USD dollar and therefor AUD/USD.

Gold's rally paused for breath below resistance ahead of NFP, where volatility is expected. The ASX bumped its head at resistance and looks primed for a retracement lower during what could be a quiet session ahead of NFP.

A softer-than-expected ISM services report was the gift that Fed doves have been waiting for ahead of tomorrow's NFP report. The USD index is now on track for a 3-week reversal pattern below resistance, and AUD/USD has broken out in style.

US yields were a touch lower with Jerome Powell saying that inflation is on the disinflationary path, ahead of key economic data from the US including ISM services, JOLTS and ADP employment reports. The ASX 200 and China look poised to move higher following a strong lead from Wall Street ahead of Independence Day.

Another day, another handle for USD/JPY which rose to a fresh multi-decade higher. Bond yields also continued to rally after the Biden-Trump debate, which has markets concerned that a more inflationary presidency under Trump seems the more likely outcome.

Japan’s officials would like to think they have slowed the decline of the yen to a degree on Thursday, following their latest threats of intervention. However, traders could simply be taking a cautious approach ahead of Friday’s US inflation report, which is keeping USD/JPY just below its 38-year high.