INSIDE G-10: Yen Surges After BOJ Holds Rates, GBP Declines
(Bloomberg) -- The yen climbs vs all G-10 peers after the BOJ policy; CHF little changed after SNB holds rates at -0.75%.
- European stocks open lower; Nikkei drops 3%
- Traders report waning liquidity in the options market, wider spreads, as the U.K.’s EU referendum approaches
- SNB says central banks are in close contact on Brexit
- USD/JPY -1.8% to 104.23, pares losses after falling as much as 2.3% to 103.55 earlier in the session
- Pair breaks below the 200-month moving average; next support is 103.50, Aug. 22 2014 low
- Option barriers were triggered at 105.00, 104.50 and 104.00 and have accelerated the downside
- Yen surges on buying from leveraged and hedge accounts, according to an Asia-based FX trader
- One-week 25-delta risk reversals now 178 bps in favor of USD puts vs 6 bps yesterday; suggests JPY bullish momentum is the most bullish since May 3
- BOJ leaves policy unchanged; Japanese Bankers Association Chairman says BOJ should assess impact of negative interest-rate policy before expanding it
- GBP/USD -0.4% to 1.4154, after gaining the most in a week yday
- A poll by Ipsos Mori showed a 6ppt lead in support for U.K. to leave the EU, a reversal from its previous survey
- William Hill odds for U.K. remaining in EU now at 4/7 vs 4/9 earlier; odds for U.K. leaving EU now at 11/8 vs 7/4 earlier
- Few bids seen at 1.4100 but the spot market remains illiquid: traders
- Hedge funds set to cut Brexit trades ahead of vote: Unigestion
- Goldman sees GBP sliding 11% vs peers if U.K. votes to leave the EU
- EUR/CHF little changed at 1.0824 after SNB policy decision
- Pair’s haven-buying interest ahead of U.K. vote on EU membership next week overstated: trader
- Support for EUR/CHF at 1.07899, low on June 14; resistance is 233-DMA at 1.09088
- BBDXY -0.1% to 1,185.12, falling for second day after Fed reins in rate-hike path
- Fewer Fed officials expect the central bank to raise interest rates more than once this year
- FOMC statement and latest economic projections that suggest a slower pace of tightening signal that central bankers could be bracing for economic reversal: ROUNDUP here
- EUR/USD -0.31% to 1.1225
- Resistance is 1.1303/12, June 13 high; support is 1.1189, June 14 low
- ECB says stimulus from latest measures will have further impact
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