The yen is the best performing major currency on the day
Equities were among the contributors to the rise in the yen today with the negative tone from Chinese stocks towards the end of Asian trading helping to fuel losses in European equities as well. However, most European stocks have gone into the black now but the yen has barely flickered. So, what gives?
BOJ summary of opinions release
The statement showed a split or at least some difference in opinion between board members on the 10-year JGB yield target. There were a couple of members suggesting that the range should at least be double the current range of -0.1% to 0.1% while one member suggested that the central bank could afford a move between -0.25% to 0.25%.
Current 10-year JGB yields sit near the highs following the BOJ decision last week, with BOJ governor Kuroda commenting that the central bank would allow for yields to rise up to 0.2%.
But the difference in opinion further highlights the fact that there is some form of credence to the report that the BOJ is turning more hawkish by Reuters citing comments by deputy governor Amamiya here.
And that is a yen positive.
Technical levels give way
A breakdown of near-term technical levels is another reason for further intensified selling in yen pairs. As highlighted earlier, USD/JPY and EUR/JPY both broke below the two key hourly moving averages and that has seen sellers drive prices lower on the day.
Looking at GBP/JPY:
It's very much the same story as well with price now falling below the end-June low and also below the 76.4 retracement level @ 143.39. The year's low @ 143.20 is within touching distance and if that gives way it will help to provide further tailwind for the yen later on.