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Daily Currency Watch
Overnight comment in brief:
24 March 2023 | MoF data reveal huge flows
- Asian equities were mainly lower, while UST yields were little changed through Asian trade. Japan’s headline CPI for February dropped as expected from 4.3%YoY to 3.3%YoY entirely due to government subsidies. Ex fresh food and energy CPI pushed up from 3.2%YoY to 3.5%YoY. The acceleration in core prices hints a price pressures being a little former than expected. The flash PMI data edged higher, with the composite index up at 51.9 in March, up from 51.1 in February. MoF’s weekly flows data showed massive buying of overseas bonds in the week to 17 March. Generally, March is a quiet period ahead of fiscal year end but we believe that Japanese banking accounts have pounced in the wake of the emergence of stress in overseas banking sectors. In the week to 17 March Japanese investors were net buyer to the tune of ¥3335bn. At the same time overseas investors were huge buyers of Japanese bonds, to the tune of ¥4095bn – a record amount. Overseas investors were also heavy sellers of Japanese stocks. USD/JPY pushed down towards 130.0 but closed the session around 130.40.
- It was a quiet start to trade for EUR ahead of the PMI data. EUR/USD sits at 1.0830 as Europe opens. UK consumer confidence nudged higher as expected in March, while February retail sales in the UK were a lot firmer than expected. Neither report seemed to impact sterling. GBP/USD sits around 1.2275 as European trade gets underway.
Read the full report - 24 March 2023
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