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Forex pairs in this Article » USD/JPY (Barcelona) - Derek Halpenny, European Head of Global Markets Research at the Bank of Tokyo Mitsubishi UFJ notes that the dollar remains broadly firm but stable with little from Japan to drive USD/JPY one way or the other.

He sees that the key focus in Asia is China again and USD/Asia is mostly higher today in part due to another drop in Chinese equities. He writes, “The Shanghai Composite is a little less than 0.5% lower which weighed on Japanese equities (Nikkei closed down 1.0%).” Additionally, he notes that the PBOC also fixed the USD/CNY rate higher, which was the sixth time in the last seven trading days that the PBOC fixed the USD/CNY rate higher and suggests the authorities now want a period of stability, at least over the very short-term. He writes, “USD/CNY remains higher than the May closing rate – if that remains the case through to Friday’s close it will be the first month since February when USD/CNY has moved higher on a monthly basis.” Halpenny finishes by noting that the fact that the PBOC released a statement yesterday acknowledging that it had supplied liquidity to certain banks and could do so again has certainly helped calm market conditions more generally.
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