ForexLive European FX news wrap: Yen falls as Ueda fails to convince, Bitcoin up again

Headlines:

• Japanese yen struggles to light up as wage talks come into focus
• BOJ’s Ueda says will consider policy changes once achievement of price target is in sight
• BOJ reportedly considers scrapping ETF purchases with inflation target in sight
• Japan PM Kishida: Will call for wage hikes exceeding last year for small, mid-sized firms
• Today’s wage results could be driving force to realise virtuous cycle in Japan – JCM chair
• Japan Business Federation head reaffirms odds of wage hikes beating last year’s levels
• ECB’s Villeroy: It is more likely a rate cut will happen in June than in April
• Bitcoin pulls through to hit $73,000 again after yesterday’s brief dip
• UK January monthly GDP +0.2% vs +0.2% m/m expected
• Eurozone January industrial production -3.2% vs -1.5% m/m expected

Markets:

• EUR leads, JPY lags on the day
• European equities higher; S&P 500 futures up 0.1%
• US 10-year yields up 0.9 bps to 4.164%
• Gold up 0.3% to $2,162.53
• WTI crude up 1.4% to $78.68
• Bitcoin up 3.0% t o $73,195

The Japanese yen was an early mover in Asia as early indications showed that bigger firms are meeting demands in the spring wage negotiations. USD/JPY fell to a low of 147.23 before recovering to 147.60 ahead of European trading.

But as BOJ governor Ueda continued to offer little suggestion of an imminent policy shift next week, the yen fell further with USD/JPY moving back up to hit the 148.00 mark.

Outside of the yen, there was very little movement among major currencies. The dollar steadied as traders are settling down after the chaotic post-CPI reaction yesterday. EUR/USD is little changed at 1.0930 levels, stuck in a 20 pips range on the day. Meanwhile, other dollar pairs are rather flattish so there isn’t really much to scrutinise during the session.

This comes as the equities mood is also looking fairly tentative and muted. European indices are slightly higher, carrying the positive momentum from yesterday with the DAX and CAC 40 at fresh record highs. But US futures are little changed and that is not offering much for traders to work with for now.

The bond market is also looking rather lethargic, so that’s not helping either. Treasury yields are not budging after the rise yesterday though there is the 30-year notes auction to look out for later.

While traditional markets are not doing too much, Bitcoin surged higher to a fresh record high above $73,000 during the session. The brief drop under $70,000 yesterday is proving to be just another blip again as buyers continue to keep up the momentum.

This article was written by Justin Low at www.forexlive.com.