It’s not a pleasant look as we head towards European trading | Forexlive
So far, we’re only seeing the reaction from Asia to the BOJ bombshell so best be warned that there could be further extensions to the already big moves later in Europe and US trading. The Japanese yen is the biggest mover in the major currencies space, with USD/JPY being sent lower to its lowest level in four months:
The pair was trading around 137.15 in the run up to the BOJ policy decision, and is now trading just above 133.00 instead. That’s a whopping 400 pips (almost) move.
But amid the volatility and the rout in bonds, equities are also being dragged down as well and that is teeing up a risk-off day in markets as we look towards European trading. And it is one that could get really ugly, considering the nature of the surprise by the BOJ.
The dollar, while weaker against the yen, is up elsewhere across the board with EUR/USD invalidating its potential upside break from yesterday here. The pair is now down 0.2% to 1.0585 with GBP/USD also down 0.4% to just under 1.2100. Meanwhile, the antipodeans are hit the hardest with AUD/USD down 1.0% to 0.6635 and NZD/USD down 0.9% to 0.6310 at the moment.
Elsewhere, we are seeing S&P 500 futures be down by 39 points, or 1.0%, and 10-year Treasury yields up 9 bps to 3.68% on the day. It’s a case of buy the dollar (and now yen), sell everything else.