USD/JPY Weekly Price Forecast – US Dollar Has a Wild Ride Against the Yen for the Week
The US Dollar continues to see a lot of volatility against the Japanese yen, as the markets have started to try to price in the idea of the economy slowing down.
The US Dollar continues to see a lot of volatility against the Japanese yen, as the markets have started to try to price in the idea of the economy slowing down.
According to PANews, the U.S. Securities and Exchange Commission (SEC) has issued subpoenas to at least three cryptocurrency venture capital firms this year. Sources familiar with the investigation revealed that the subpoenas are titled 'In the Matter of Certain Crypto Asset Intermediaries.' The SEC is investigating whether there have been violations of federal securities laws. DL News reviewed the subpoenas but could not disclose the specific targets of the SEC's investigation.The SEC's focus on crypto venture capital indicates that the agency is scrutinizing the initial funding channels for most crypto startups. An anonymous source stated that at least two other crypto venture capital firms received similar document requests. The subpoenas demand information on any token transaction contracts involving investors. A lawyer from a crypto venture capital firm not affected by the subpoenas described the investigation as an overly broad and costly search. This lawyer, who had heard about the investigation before speaking with DL News, requested anonymity to avoid public mention of the SEC.Elisha Kobre, a lawyer specializing in securities and commodities fraud at Bradley Arant Boult Cummings, commented that the SEC's scrutiny of venture capital is reasonable. He suggested that the SEC might consider this an additional enforcement area. Sources familiar with the investigation indicated that financial regulators might be interested in whether crypto venture capital firms act as 'statutory underwriters.' Statutory underwriters are broker-dealers who purchase securities intending to distribute them to the public.Many crypto startups file token financing records with the SEC but often seek exemptions from registering their securities, as they only offer future token rights to qualified investors. The SEC is reportedly interested in whether these qualified investors are distributing unregistered securities to a broader retail market. The source added that such actions could 'poison the initial issuance,' referring to the potential impact when investors sell tokens on the public market.
The yen carry trade, where US investors borrow Japanese yen, due to its low interest rate environment, to purchase US monetary assets for a profit, has backfired on some investors as the Bank of Japan began to increase interest rates. A sell-off resulted, in part, due to this phenomenon having an impact on the US market. Yahoo Finance markets and data editor Jared Blikre joins Catalysts to break down the Japanese yen carry trade and its impact on the US stock market. For more expert insight and the latest market action, click here to watch this full episode of Catalysts. This post was written by Nicholas Jacobino
One of the more popular trades in recent memory was the yen carry trade (JPY=X), which backfired after the Bank of Japan started a rate hiking cycle. While it resulted in a sell-off on Monday, will traders continue this strategy? TD Securities global head of FX and EM strategy Mark McCormick joins Catalysts to give insight into the carry trade and movements in global markets Right out of the gate, McCormick affirms: "I do not think the carry trade unwind is over. I think we have a long way to go. I think you need to think about whether it's kind of tactical and the structural nature of it The structural nature of the carry trade is tha,t for pretty much around the last decade, Japanese investors have put their money, mostly pension funds, which accounts for about 80% of GDP in other markets. So the assets that they're tracking in other markets are actually a big form of the carry trade." When asked whether the Chinese yuan could be the next carry trade to unwind, McCormick responds: "I think you need to kind of disentangle the correlation of the yuan versus the yen. They have re-correlated right now. They're being driven by similar factors. So the Chinese yuan is a good funding for a carry trade. And again, if you think about what drives a carry trade in markets, why people love it. It's very simple. It's what you need is rate divergence, so one country needs higher rates, another country needs lower rates. And you need low volatility." For more expert insight and the latest market action, click here to watch this full episode of Catalysts. This post was written by Nicholas Jacobino
London and Europe have clawed back losses from Monday’s plunge.
According to Odaily, Richmond Federal Reserve President and 2024 FOMC voting member, Thomas Barkin, stated that the Federal Reserve has time to assess whether the U.S. economy is normalizing or weakening. If the latter occurs, it would necessitate stronger actions from officials. Barkin emphasized the importance of evaluating the economic situation carefully before making any decisions.Kansas City Federal Reserve President, Esther George, noted that despite inflation exceeding targets, the labor market remains healthy. However, she is not yet ready to support a rate cut. Known for her hawkish stance, George highlighted the need for cautious assessment of progress, given that inflation surged to multi-decade highs two years ago. She stressed the importance of focusing on the worst-case scenarios in the data rather than the best-case scenarios.
The US Dollar has been somewhat soft in the early hours on Friday, as it looks like the market continues to run towards the Japanese yen. This safety trade seems to be picking up steam, but at this point in time, it is likely that we will continue to see
The Nasdaq Composite was down 0.2%. While normally not a market-moving datapoint, recent worries about the economy have market participants grasping for any updates that counter concerns about a recession. The next major piece of data for the stock market will likely be Wednesday’s consumer price index for July.
The Aussie dollar initially fell hard for the week, only to turn around and show signs of life. This is a market that will continue to follow the risk appetite of traders, the global growth situation, and of course the Asian economic realities.
DMarket tops daily NFT sales for the second consecutive day.