Headlines:
- BOJ reportedly erring towards leaving policy unchanged next week
- Japanese yen falls further on the week on word that BOJ is likely to keep policy unchanged
- Japan 10-year yields fall to two-week lows as BOJ hopes squandered once again
- Japan top currency diplomat Kanda says watching FX market with sense of urgency
- Major central bank decisions return to the spotlight next week
- UK June retail sales +0.7% vs +0.2% m/m expected
- ICYMI: Nasdaq to undergo "special" rebalancing effective next week
Markets:
- CHF leads, JPY lags on the day
- European equities mixed; S&P 500 futures up 0.2%
- US 10-year yields down 1.3 bps to 3.840%
- Gold down 0.2% to $1,966.17
- WTI crude up 1.1% to $76.52
- Bitcoin up 0.1% to $29,789
What looked to be a quiet session didn't pan out that way, as the Japanese yen took center stage and fumbled after a Reuters report saying that the BOJ is not likely to tweak its policy settings next week.
The yen has already been on the descend since the end of last week but saw a considerable drop today with USD/JPY rising from around 140.30 to a high of 141.95 after the news. That came alongside a notable drop in 10-year JGB yields, which hit a low of 0.406% from around 0.480% at the start of the day.
As the yen dropped, the dollar managed to consolidate its position once again as it holds steadier across the board. UK retail sales provided just a brief lift to the pound with cable rising to 1.2900 from around 1.2875 before falling to 1.2825 currently.
The antipodean currencies also didn't enjoy themselves despite risk sentiment keeping in more positive light. AUD/USD is down 0.7% to 0.6735 and NZD/USD down 0.8% to 0.6185 at the moment.
As we look towards the end of the week, US stocks will be a focus point with $2.4 trillion options contracts set to expire alongside the anticipation of the rebalancing in the Nasdaq.