CFDs are complex instruments. 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. 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: USD/JPY at new 23-year high; UK CPI; Powell testimony

Watching GBP ahead of CPI data; USD/JPY hits a new 23-year high after BoJ minutes; big FX news likely to be around Jerome Powell's testimony. Europe expected down; Wall Street lost all its earlier gains yesterday; Asia down.

Is the equity rebound already over?

Yesterday, the main three US indices posted sizeable gains, all in excess of 2%.

But overnight, a totally different picture emerged, as all major indices in the APAC region showed losses. Technology stocks were the most affected, with South Korea’s tech index, Kosdaq falling more than 3%, followed loosely the Hang Seng Tech Index.

In Europe, FTSE 100, DAX and CAC 40 all opened lower, after recording modest gains on Tuesday.

In Japan, Bank of Japan (BoJ) minutes showed that many board members expressed the need to support the country's economy and therefore keep the bank's massive stimulus programme in place. Yet, other members have concerns regarding the recent yen volatility. "A few members said excessive fluctuations in the foreign exchange market over a short period of time, such as those observed recently, would raise uncertainties about the future and make it more difficult for firms to formulate their business plans".

But it was also stressed that the BoJ's monetary policy aims to achieve price stability, not to control exchange rate moves.


Yesterday the yen fell further against the dollar. USD/JPY climbed above ¥136 for the first time since October 1998.

Sterling also is under scrutiny today. The latest data shows that UK consumer price index (CPI) set a new 40-year high in May. CPI rose by 9.1% on a year-on-year basis, in line with economists’ expectations.

Factory gate prices increased more than anticipated, by 15.7%. Also watch out for Canada inflation data at 1.30pm.

Jerome Powell testimony

Federal Reserve (Fed) chair, Jerome Powell, will head to the US congress later today for his semi-annual testimony.

He will first have to answer questions from the Senate Banking Committee, an exercise to be repeated tomorrow in front of the House Financial Services Committee.


On the commodity markets, WTI and Brent fell in excess of 3%.

US President Joe Biden is today expected to call for a temporarily suspension of the 18.4-cents a gallon federal tax on gasoline, before meeting US oil bosses tomorrow to ask them to do more to bring fuel prices down.

China growth remains a concern for commodity traders. Dalian iron ore fell to a 16-week low, while copper now trades below $8,900 per tonne.

Gold is down for a fourth straight day, closing down on $1,821 support.

Finally, traders will remain attentive to the price of cotton. The commodity is down for a 10th consecutive day and yesterday broke its March 2022 support.

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

Live prices on most popular markets

  • Forex
  • Shares
  • Indices

You might be interested in…

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.