ForexLive European FX news wrap: Yen slides further in BOJ aftermath

<p>Bank of Japan reaction:</p><ul><li><a href="https://www.forexlive.com/news/the-boj-underdelivers-once-again-20231031/">The BOJ underdelivers once again</a></li><li><a href="https://www.forexlive.com/centralbank/boj-governor-ueda-will-patiently-continue-monetary-easing-with-decided-new-measures-20231031/">BOJ governor Ueda: Will patiently continue monetary easing with decided new measures</a></li><li><a href="https://www.forexlive.com/centralbank/ueda-dont-think-long-term-rates-will-come-under-pressure-to-exceed-1-20231031/">Ueda: Don't think long-term rates will come under pressure to exceed 1%</a></li><li><a href="https://www.forexlive.com/centralbank/bojs-ueda-next-springs-wage-negotiations-will-be-an-important-factor-20231031/">Ueda: Next spring's wage negotiations will be an important factor</a></li><li><a href="https://www.forexlive.com/news/japan-did-not-spend-on-fx-intervention-in-the-four-weeks-to-27-october-20231031/">Japan did not spend on FX intervention in the four weeks to 27 October</a></li><li><a href="https://www.forexlive.com/news/eurjpy-on-the-move-climbs-to-highest-level-since-2008-20231031/">EUR/JPY on the move, climbs to highest level since 2008</a></li><li><a href="https://www.forexlive.com/news/japanese-yen-falls-further-as-tokyo-seen-on-the-sidelines-20231031/">Japanese yen falls further as Tokyo seen on the sidelines</a></li></ul><p>Other headlines:</p><ul><li><a href="https://www.forexlive.com/news/treasury-yields-fall-further-ahead-of-the-main-event-tomorrow-20231031/">Treasury yields fall further ahead of the main event tomorrow</a></li><li><a href="https://www.forexlive.com/news/eurozone-october-preliminary-cpi-29-vs-31-yy-expected-20231031/">Eurozone October preliminary CPI +2.9% vs +3.1% y/y expected</a></li><li><a href="https://www.forexlive.com/news/france-october-preliminary-cpi-40-vs-40-yy-expected-20231031/">France October preliminary CPI +4.0% vs +4.0% y/y expected</a></li><li><a href="https://www.forexlive.com/news/eurozone-q3-preliminary-gdp-01-vs-00-qq-expected-20231031/">Eurozone Q3 preliminary GDP -0.1% vs 0.0% q/q expected</a></li><li><a href="https://www.forexlive.com/news/france-q3-preliminary-gdp-01-vs-01-qq-expected-20231031/">France Q3 preliminary GDP +0.1% vs +0.1% q/q expected</a></li><li><a href="https://www.forexlive.com/news/italy-q3-preliminary-gdp-00-vs-01-qq-expected-20231031/">Italy Q3 preliminary GDP 0.0% vs +0.1% q/q expected</a></li><li><a href="https://www.forexlive.com/news/germany-september-retail-sales-08-vs-05-mm-expected-20231031/">Germany September retail sales -0.8% vs +0.5% m/m expected</a></li><li><a href="https://www.forexlive.com/news/germany-september-import-price-index-16-vs-07-mm-expected-20231031/">Germany September import price index +1.6% vs +0.7% m/m expected</a></li></ul><p>Markets:</p><ul><li>EUR leads, JPY lags on the day</li><li>European equities higher; S&amp;P 500 futures up 0.3%</li><li>US 10-year yields down 4.4 bps to 4.832%</li><li>Gold up 0.1% to $1,998.93</li><li>WTI crude up 0.6% to $82.85</li><li>Bitcoin up 0.3% to $34,525</li></ul><p>The spotlight today is on the Japanese yen as it capitulated following a less hawkish than expected BOJ earlier in the day.</p><p>The central bank made a minor tweak on its yield curve control policy but markets were expecting more, as BOJ governor Ueda then delivered rather dovish remarks in the aftermath. USD/JPY nudged up to 150.00 at the end of Asia trading before extending higher to 150.40 at the start of European trading.</p><p>Then, we got confirmation by Tokyo that they didn't spend a dime in intervening in the FX market during the month. That is a sort of green light and took the yen even lower on the session, with USD/JPY moving up to 150.75.</p><p>The dollar isn't the best gauge of the yen's plight though, as the greenback itself is slightly softer amid a push lower in Treasury yields. The bond market is a focus point ahead of the Treasury refunding tomorrow, which I would argue is the main event in the day ahead – not the Fed.</p><p>Instead, it was the euro that is shining the brightest as we saw softer inflation figures and a sluggish picture in the economy in Q3. The single currency gained traction as equities also reversed losses on the day. EUR/USD moved up from around 1.0600 to 1.0670 before holding just under that for now.</p><p>EUR/JPY is the standout as it breaks above the 160.00 mark to 160.50 levels currently – its highest since August 2008.</p><p>Other than that, the rest of the major currencies bloc remain more muted although commodity currencies have recovered a bit of ground against the dollar after a slower start.</p><p>That comes as stocks also rebounded with S&amp;P 500 futures now up 0.3%, after having been down 0.3% earlier in the day. Month-end flows will be a consideration, so just be wary of that in the session ahead.</p>

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