Sanitation: Holiday week could be prime time for yen intervention

Morning Bid Europe

A look at the day ahead in European and global markets

By Rae Wee, Asia Markets Correspondent

Data refreshes every time you open this email. For more European market news, click here. Please send any feedback to morningbid@thomsonreuters.com.

It's been a slow start to the week in Asia with Japanese markets closed for a holiday on Monday, but currency traders are watching with bated breath for any signs of official yen buying from Tokyo to stem its slide.

The trading week will be interrupted by the U.S. Thanksgiving holiday on Thursday, followed by Black Friday which will see shortened hours, opening a possible window for authorities to step in.

Today's Market News

Bang For The Buck

FILE PHOTO: Banknotes of Japanese yen are seen in this illustration picture taken September 22, 2022. REUTERS/Florence Lo/Illustration/File Photo/File Photo

Past interventions haven taken place during periods of low liquidity, allowing the authorities to move prices more sharply, or, as analysts put it, get the most "bang for their buck".

In such cases, the Ministry of Finance decides when to step in and the Bank of Japan acts as its agent.

The yen fell slightly on Monday in line with the broader market, and last stood at 156.62 per dollar.

It remained pinned near last week's 10-month trough of 157.90, though the yen appears to have found a floor after Finance Minister Satsuki Katayama ramped up verbal warnings of official yen buying on Friday.

Japan can actively intervene in the currency market to mitigate the negative economic impact of a weak yen, Takuji Aida, a private-sector member of a key government panel, said in a television programme on public broadcaster NHK on Sunday.

Consumers In Spotlight

Elsewhere, stocks found much-needed reprieve after last week's beating, helped by comments from influential Federal Reserve policymaker John Williams who said on Friday that interest rates can fall "in the near term".

That sent traders ramping up bets of further easing next month, with Fed funds futures now pointing to a 57% chance of a 25-basis-point cut.

Still, with global equity markets in the midst of a grim month, attention will turn in the week ahead to holiday shopping trends and U.S. retail sales for signs of strength in consumer spending, which accounts for more than two-thirds of U.S. economic activity.

Graphics are produced by Reuters.

Key developments that could influence markets on Monday:

German Ifo business sentiment (November)
France: Reopening of 3-month, 6-month and 11-month government debt auctions
Germany: Reopening of 7-month government debt auction

Graphics are produced by Reuters.

Opinions expressed are those of the author. They do not reflect the views of Reuters News, which, under the Trust Principles, is committed to integrity, independence, and freedom from bias.

Sponsors are not involved in the creation of newsletters or other Reuters news content. Advertise in this newsletter or on Reuters' website

Morning Bid is sent every weekday morning. Think your friend or colleague should know about us? Forward this newsletter to them. They can also sign up here.

Want to stop receiving this email? Unsubscribe here. To manage which newsletters you're signed up for, click here.

This email includes limited tracking for Reuters to understand whether you've engaged with its contents. For more information on how we process your personal information and your rights, please see our Privacy Statement.

Terms & Conditions