The Japanese yen is on fire — here’s what’s happening in FX

Good morning!

The biggest move in FX as of Thursday, April 7 8:15 a.m is the Japanese yen.

Here’s the full scoreboard:

  • The Japanese yen is stronger by 1.4% at 108.32 against the dollar after the Bank of Japan’s governor, Haruhiko Kuroda, suggested the central bank could ease policy even further if needed. The yen reached as high as 108.02 per dollar earlier in the session, its strongest since October 29, 2014. The yen is now up nearly 10% versus the dollar in 2016.
  • The Chinese yuan ended up 0.2% at 6.4681 per dollar after the country announced that its foreign-exchange reserves increased by $10 billion in March to $3.2312 trillion. The 0.3% uptick in reserves was the first increase in four months and is a welcome sign for China, which bled through $800 billion of foreign cash after its reserves peaked at about $4 trillion in mid-2014.
  • The South African rand is weaker by 0.9% at 15.2271 against the dollar despite manufacturing output rising by 1.3% month over month, above forecasts of -0.1%. Additionally, manufacturing climbed 1.9% year-over-year in February, the sector’s strongest reading since July 2015. “Today’s strong output figure is a rare sign of life from South Africa’s moribund manufacturing sector,” wrote Capital Economics’ John Ashbourne. “Even so, we expect that the sector will struggle to sustain much growth this year.”
  • The dollar index is little changed ahead of a relatively light data day featuring initial jobless claims and consumer credit. First up will be claims at 8:30 a.m. ET.
  • The euro is flat at 1.1397 after Turkish President Recep Tayyip Erdogan warned the EU that Ankara would not implement a key deal on reducing the flow of migrants if Brussels failed to fulfil its side of the bargain.
  • The British pound is down 0.2% at 1.4095. On Wednesday, Jamie Dimon was the latest finance exec to warn that Brexit — or Britain leaving the EU — could have “large and potentially unknown” consequences.

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