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USD/JPY retraces after BoJ rate hike boost – BBH

USD/JPY reversed most of yesterday’s dip as markets digested BoJ Governor Ueda’s hawkish comments boosting December rate hike expectations, BBH FX analysts report.

Rising JGB yields limit BoJ tightening capacity

"USD/JPY retraced most of yesterday’s undershoot triggered by Bank of Japan (BOJ) Governor Ueda juicing up December rate hike bets. Rising JGB yields is pushing up Japan’s debt servicing costs, limiting the BOJ tightening capacity and posing a headwind for JPY."

"We anticipate the sell-off in JGBs to stabilize on improving demand from investors. The 10-year bond sale's average bid-to-cover ratio was 3.59 vs. 2.97 in November and a 12-month average of 3.20. A 30-year bond auction is due on Thursday."

EUR/USD holds tight around 1.1610 – BBH

EUR/USD remains range-bound near 1.1610, with support at 1.1500 and resistance at the 100-day moving average of 1.1644. Eurozone November CPI data reinforces the ECB’s on-hold stance, with headline inflation at 2.2% y/y and core CPI steady at 2.4% y/y, BBH FX analysts report.
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Brazil Industrial Output (MoM) came in at 0.1% below forecasts (0.4%) in October

Brazil Industrial Output (MoM) came in at 0.1% below forecasts (0.4%) in October
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