Skip to content

We want to clarify that IG International does not have an official Line account at this time. We have not established any official presence on Line messaging platform. Therefore, any accounts claiming to represent IG International on Line are unauthorized and should be considered as fake.
CFDs are complex instruments. 72% of retail client accounts lose money when trading CFDs, with this investment provider. You can lose your money rapidly due to leverage. Please ensure you understand how this product works and whether you can afford to take the high risk of losing money.
CFDs are complex instruments. 72% of retail client accounts lose money when trading CFDs, with this investment provider. You can lose your money rapidly due to leverage. Please ensure you understand how this product works and whether you can afford to take the high risk of losing money.

Early Morning Call: JPY rally continues as YCC speculation mounts

USD continues to strike new lower lows, USD/JPY closing in on 126.36 May 2022 support, while USD/CNH is at a new six-month low.

Video poster image

Equity market overview

Ther is no real direction in equity markets in Europe this morning, after a mixed session in the APAC region overnight.

US equity and bond markets will be closed today to celebrate Martin Luther King Day.

In Japan, producer price index (PPI) rose at a faster-than-expected pace in December - a 10.2% increase year-on-year (YoY) - following a 9.7% increase the previous month, and higher than the median market forecast for a 9.5% gain. This is another confirmation of the recent growing signs of inflationary pressure that could force the central bank to raise interest rates soon.

Currencies

The yen's rally continues this morning, following a strong week of gains. Over the past few days, speculation around potential further policy tweaks has been mounting. The Bank of Japan (BoJ) surprised the markets about a month ago with its decision to widen the band around its 10-year yield target to 0.5% from previous 0.25%.

Last Friday, the Bank of Japan had to step in with a record amount of bond-buying operations after the benchmark 10-year bond yield cap climbed as high as 0.54%.

The US dollar is down this morning, not only against the yen, but also against all major currencies. Cable trades at a one-month high, EUR/USD is back near the nine-month high set at the end of last week, and the Australian dollar rose for a few hours overnight above the psychologically important level of 70 cents against the greenback.

The recent dollar weakness also benefits gold. The precious metal is now trading comfortably above $1,900, having reached $1,929 earlier this morning, a near nine-month high.

UK retail

It's been a surprisingly good Christmas, on the whole, for the UK retail sector according to the reports we've seen thus far.

Some tading statements to be published this week, starting on Tuesday with Ocado. Marks & Spencer said that it was taking 30% of Ocado’s Christmas spending online.

On Wednesday: WHSmith, Currys, Burberry Group, Just Eat Takeaway.com, and Thursday: Deliveroo, Dunelm and Boohoo.

According to the Times, Marks & Spencer plans to open 20 new stores, which would lead to the creation of 3,400 jobs in the UK. The newspaper says the retailer will open eight "full-line" stores and 12 food halls.

Earnings season

US earnings season officially started last Friday with reports from four of the six main US banks.

US earnings publications will resume tomorrow with Goldman Sachs, Morgan Stanley, and United Airlines.

On Wednesday sees Alcoa reporting, followed on Thursday by Procter & Gamble and Netflix.

Commodities

Oil prices consolidated this morning after the gains recorded during the second half of last week.

Last week, the Baker Hughes total rig count rose by three to 775. The number of oil rigs in operation increased by five to 623.

There is also a pause on the industrial metals market: copper, zinc, and aluminium are trading lower this morning, after last week's strong gains.


This information has been prepared by IG, a trading name of IG Markets Limited. In addition to the disclaimer below, the material on this page does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. IG accepts no responsibility for any use that may be made of these comments and for any consequences that result. No representation or warranty is given as to the accuracy or completeness of this information. Consequently any person acting on it does so entirely at their own risk. Any research provided does not have regard to the specific investment objectives, financial situation and needs of any specific person who may receive it. It has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such is considered to be a marketing communication. Although we are not specifically constrained from dealing ahead of our recommendations we do not seek to take advantage of them before they are provided to our clients.

Start trading forex today

Trade the largest and most volatile financial market in the world.

  • Spreads start at just 0.6 points on EUR/USD
  • Analyse market movements with our essential selection of charts
  • Speculate from a range of platforms, including on mobile

Find out more

Live prices on most popular markets

  • Forex
  • Shares
  • Indices

You might be interested in…

<h3>How much does trading cost?</h3>
<h3>Find out about IG</h3>
<h3>Plan your trading</h3>

Find out what charges your trades could incur with our transparent fee structure.

Discover why so many clients choose us, and what makes us a world-leading provider of CFDs.

Stay on top of upcoming market-moving events with our customisable economic calendar.