Yen tumbled against most major rivals on Friday following the Bank of Japan’s policy decisions today.

In a step that was widely expected, the Bank of Japan maintained interest rates unchanged at below 0.10%, after its decision to move rates outside of negative territory in March. 

On trading, USD/JPY rallied by 1.3% to 157.7 as of 19:26 GMT.

Aussie 

The Australian dollar rose 0.3% against its US counterpart as of 19:26 GMT to 09.6534. 

Earlier Australian data showed producer prices rose 0.9% last month, same as the previous reading.

The Dollar 

The dollar index rose 0.4% as of 16:22 GMT to 105.9, with a session-high at 106.1, and a low at 105.4. 

Recent US data showed personal spending, the Fed’s favorite inflation index, stabilized at a 2.8% growth rate in March, but remained above analysts’ expectations of 2.7%. 

Core personal spending, excluding food and energy, rose 2.7%, up from 2.5%.

Personal income rose 0.5% last month, above 0.3% in February. 

Data from Michigan University showed the consumer confidence index down 2.8% m/m in April to 77.2 from 79.4 in March. 

Palladium prices fell on Friday as the dollar rose against most major rivals, with the industrial metal relinquishing the $1000 barrier once more.

Recent US data showed personal spending, the Fed’s favorite inflation index, stabilized at a 2.8% growth rate in March, but remained above analysts’ expectations of 2.7%. 

Core personal spending, excluding food and energy, rose 2.7%, up from 2.5%. 

Personal income rose 0.5% last month, above 0.3% in February. 

Palladium was recently boosted by concerns about supply shortages from Russia as the US and the EU tighten their sanctions on Russian metal exports to weaken its war capabilities in Ukraine. 

Palladium

Palladium is used heavily in the automotive sector, and especially in diesel cars to reduce exhaust fumes.

However, as EV car adoption spreads, demand on internal combustion cars and palladium in turn will decline accordingly. 

Palladium’s Historical Pricing 

Across the previous decade, palladium’s instant prices wavered between $500 and $1500, beforere surging to a record high at $3440 in March 2022 following the onset of the Russian invasion of Ukraine, which disrupted supplies. 

However palladium now has lost over two thirds of its valuation due to steep increase in EV adoption rates. 

Otherwise, the dollar index rose 0.5% to 106.1 as of 16:22 GMT, with a session-high at 106.1, and a low at 105.4. 

On trading, palladium futures due in June tumbled 2.2% to $960.5 an ounce as of 16:22 GMT. 

Oil prices rose in European trade on Friday, extending gains for the second straight session, with US crude scaling a one-week high, on track for weekly gains following a surprise US inventory drawdown. 

Markets are now focusing on oil market fundamentals once more as the tension between Iran and Israel fades, while hopes climb for improving US demand .

Prices 

US crude rose 0.8% to $84.42 a barrel, the highest in a week, with a session-low at $83.61. 

Brent rose 0.7% to $87.96 a barrel, with a session-low at $87.79. 

On Thursday, US crude rallied 1.2%, while Brent added 0.1% as the US dollar declined against major rivals. 

Weekly Trades

Oil prices are up 2.25% on average this week, on track for the first weekly profit in three weeks.

US Stocks 

The Energy Information Administration reported a drop of 6.4 million barrels in US crude stocks last week to 453.6 million barrels, while analysts expected a drop of 2.1 million barrels.

Gasoline stocks fell 0.6 million barrels to 226.7 million barrels, as distillate stocks rose by 1.6 million barrels to 116.6 million barrels. 

US Production

The EIA also reported no change in US production last week at 13.1 million bpd. 

Iran-Israel Tensions Fade  

The Iranian government has strongly signaled that it doesn’t plan to react to Israel’s recent attack on Iranian soil on Friday.

Iran’s foreign minister said in earlier remarks that as long as Israel doesn’t attack Iranian interests once more, Iran won’t react. 

Global Demand 

Many analysts now expect interest rates to fall in the UK and EU in June, which would underpin growth and fuel demand. 

Capital Economics’ analysts said in a memo that the services sectors in the eurozone and the UK have expanded this month by the fastest pace in a year, indicating brisk momentum. 

Sterling rose in European trade on Friday against a basket of major rivals, extending gains for the fourth straight session against the yen, and scaling a 16-year peak and trading above the psychological barrier of 200 yen for the first time since 2008. 

The UK-Japan interest rate gap is expected to hold for an extended duration in favor of the UK, in turn boosting the pound.

The Price 

GBP/USD rose 0.7% to 196.09 yen, the highest since 2008, with a session-low at 194.33. 

The pound rallied 0.6% against yen yesterday, the third profit in a row, amid renewed concerns about the UK-Japan interest rate gap.

Selloff

The yen continues to face massive selloff pressures against major rivals amid doubts about whether the Japanese authorities will actually intervene to support the yen.

The yen also lost ground after a bearish Bank of Japan policy meeting, which hurt the odds of a new Japanese interest rate hike this year. 

Interest Rate Gap

The current Japan-UK interest rate gap stands at 515 basis points in favor of the UK, and such a gap will continue to underpin the pound especially as the odds of early UK interest rate cuts this year diminish. 

BOJ Rates

The Bank of Japan raised interest rates in March for the first time in 17 years out of negative territory, however it almost ruled out another rate hike this year.