Market Watch: USDJPY Rises to New Highs

Financial and commodity markets analytics

The dollar has started the week with a narrowly mixed performance against the G10 currencies. Sterling appears to be unaffected by cabinet reshuffle. The dollar reached new records for the year when compared to the Japanese yen. 
The majority of equity markets in Asia Pacific traded higher despite Wall Street's outsized gains ahead of the weekend. Europe's Stoxx 600 is back on the rise after falling by 1% just before the weekend. US index futures, on the other hand are showing a more softer trend. 
Gold is still stuck around the 200 day moving average, near the lows of the week before. Last week, the yellow metal dropped by 2.6%. 
December WTI remains steady in a narrow band, just below the three-day high reached at the end last week around $77.75.

Asia Pacific
Last week, the 10-year JGB yield fell three basis points to 0.84%. In the last 30 sessions, the changes in exchange rates are more closely correlated with the changes in US two-year bond yields than the changes in US 10-year bond yields. 
The Deputy Finance minister Kanda may be busy with a tax matter, but his lack of verbal interventions encouraged the dollar bulls, to push further before the weekend. This pushed the dollar up to JPY151.60, and sent the euro to an marginally new 15-year high. Today, the market seemed to be a little more confident as the dollar rose for the sixth straight session. 

The Australian dollar has recovered from its recent low of $0.6340, which was set last week. The Aussie's recoveries stalled at $0.6365 before the weekend.

Europe
The quiet week in the Eurozone begins slowly. Tomorrow, the November ZEW survey will be released along with details and revisions of Q3 GDP. In the middle of this week, the EU will update its economic forecast. 
The UK data will probably be more important to the market. Tomorrow, it's about wages and jobs. Wednesday is the CPI for October. 

This was the first time in six sessions the euro didn't trade above $1.07. Today, the euro is trading in a narrow band above $1.0680. It briefly traded above $1.07 
Sterling could have formed a bullish candlestick before the weekend. Today's follow-through purchases lifted sterling to nearly $1.2255.

America
The preliminary University of Michigan survey revealed a rise in consumer expectations for inflation. The expectation for the next year rose from 4.2% to 4.4%. This is the highest level since April. 
Moody's has lowered the US credit outlook from positive to negative. There is much discussion but not much action.  It remains the only one of the big agencies that recognize the US as a AAA credit.
The federal government will face a partial shut down if Congress does not pass new appropriation legislation or a continuing solution by the end week. 

The US dollar hit CAD1.3855 before the weekend. This was a six-day peak.