Yen fell in Asian trade on Tuesday against a basket of major rivals, sharpening losses for the third straight session against the dollar and plumbing two-week lows, triggering concerns of yet another intervention by Japanese authorities. 

Yen is approaching the red line that the Bank of Japan seemed to have demarcated with serious intentions to intervene in order to defend. 

Otherwise, traders await important US inflation data this week, which will provide important clues on the future of monetary policy.

The Pair 

The USD/JPY pair rose 0.2% to 156.50 yen, the highest since May 1, with a session-low at 156.12. 

The yen lost 0.3% against the dollar yesterday, the second loss in a row as markets focus on the Japan-US interest rate gap. 

The 160 Red Line

The 160 has become a red line for the Bank of Japan, so it’s likely it’ll intervene if the USD/JPY pair threatens to fall once again below.

Japanese authorities intervened last week and pumped $60 billion in the forex market to bring the yen higher against main rivals after it hit 1990 lows. 

Japanese Government 

Japan’s finance minister Shinuchi Suzuki said the government will work closely with the Bank of Japan to monitor the forex market and ensure stability. 

He added the government is also monitoring interest rates closely when asked about his reaction to the BOJ’s sudden decisions to cut the amount of government bonds it purchased this week. 

The IMF

The International Monetary Fund said that Japan should allow the yen to move flexibly, which would help the BOJ to focus on stabilizing prices through monetary measures. 

US Inflation

Later today, US producer prices data will be released for April, while tomorrow, US consumer prices data is scheduled for release, and it’ll be crucial for gauging the likely path ahead of monetary policies. 

Copper prices rose on Monday as the dollar inched down against most major rivals despite ongoing geopolitical tensions.

Copper is considered a highly sensitive metal to global economic conditions due to its widespread industrial applications. 

Copper rallied to two-week highs on strong global demand, driven by higher growth especially from renewable energy sectors. 

And the higher demand comes at a time of noticeably lower supplies as major producers in South America curtail production. 

The International Copper Association expects copper demand to rise from 28.3 million tonnes in 2020 to 40.9 million tonnes by 2040, with a 1.8% compounded growth rate. 

Copper is particularly boosted by the global trends in favor of renewable energy sectors, with the metal playing an important role in supporting such industries.

Otherwise, the dollar index fell 0.1% as of 16:38 GMT to 105.2, with a session-high at 105.3, and a low at 105.06. 

On trading, copper July futures rose 1.6% as of 16:33 GMT to $4.73 a pound. 

International benchmark Brent rose 1.5% in American trade on Monday, resuming its recovery from two-month lows and heading for multi-week highs on hopes of increasing Asian demand, led by China.

The current decline by the dollar is underpinning commodities as investors await important US inflation data, which will provide important clues on the timing of the next Fed interest rate cut. 

As central banks in the US, the UK, and Europe prepare to ease policies this year, it’s expected that growth and fuel demand will rebound accordingly. 

Prices 

Brent rose 1.5% to $83.63 a barrel, with a session-low at $82.29, after closing down 1.7% on Friday, the first loss in three days away from two-month lows at $81.74. 

Chinese Imports 

Recent Beijing data showed Chinese crude imports reached 44.72 million metric tonnes a day in April, up 5.45% y/y. 

Such growth indicates stronger momentum to come that could underpin prices further. 

Saudi Crude 

Saudi Arabia decided to raise its main crude prices headed for Asia for the third straight month as Riyadh sees an outlook of strong global demand. 

The Dollar 

The dollar index fell 0.2% on Monday on track for the second loss in three days, plumbing a week trough at 105.07 against a basket of major rivals. 

The dollar’s decline supports greenback-denominated commodities as they become cheaper to holders of other currencies. 

Markets now await important US inflation data for April later this week, which will help determine the likely path ahead for US policies.

Easing Global Policies 

Central Banks in Europe and Britain are expected to start cutting interest rates starting in June, which will help boost growth and fuel demand. 

Bitcoin rose over 2.5% on Monday, extending gains for the third straight session, as the important psychological barrier of $60,000 held its ground with risk sentiment improving in the market. 

Bitcoin is also boosted by the ongoing decline in US 10-year treasury yields as investors await more clues on the future of the Federal Reserve’s interest rates. 

The Price 

Bitcoin rose 2.6% today, or $1,598 at Bitstamp to $63,262, with a session-low at $60,758. 

Bitcoin rose 1.1% on Sunday, the second profit in a row amid strong buying pressure around $60,000. 

The world’s most valuable cryptocurrency lost 4% last week, the fifth weekly loss in six amid a collapse in cash inflows to US bitcoin exchange funds.

Crypto Market Value 

Crypto market value rose by $50 billion on Monday to a total of $2.428 trillion as both bitcoin and ethereum rallied. 

Positive sentiment is gripping the market currently amid strong evidence that major central banks in the UK, the US, and Europe will start cutting rates and easing policies soon, in turn boosting high-risk assets.

US Yields

US 10-year treasury yields fell 0.4% on Monday, resuming losses and pressuring the dollar. 

The developments come amid an improving risk appetite following strong corporate results for the first quarter, especially in the US.

US Rates 

Following the remarks, the odds of a Fed interest rate cut in June fell to 4%, while the odds of such a cut in July fell to 25%, as the odds of a September cut fell to 63%. 

According to the Fedwatch tool, investors are pricing in two interest rate cuts this year, likely in September and November. 

US Inflation 

Investors are waiting for a string of important US data this week, chief of which is consumer prices data for April.