Japanese Yen: Himino signals hawkish shift - MUFG

On September 16th, Deputy Governor Himino delivered a speech signaling a hawkish shift in the Bank of Japan's monetary policy stance. However, the impact on the Japanese Yen was limited, as market participants had anticipated a rate hike in September. Himino emphasized that the BoJ should pay more attention to upside inflation risks compared to previous assessments.

He also confirmed that the BoJ does not require full data to determine the impact of past rate hikes before making further adjustments. The BoJ has increasingly highlighted the importance of foreign exchange rates to the inflation outlook, aligning with the Ministry of Finance's concerns about the yen's continued weakening. With most rate hike pricing still intact after the meeting, the BoJ has effectively communicated its intention to tighten policy at a faster pace.

Jackson Hole will be a key focus moving forward, and Naoki Tamura will replace Governor Ueda, given his vocal support for a faster monetary tightening approach. No major economic data is scheduled for today, suggesting a subdued market day ahead of Fed Chair Kevin Warsh's speech at the Jackson Hole Symposium on Friday. Meanwhile, GBP/USD is trading near the lower end of its weekly range, awaiting Warsh's speech for further insight into the U.S. central bank's rate path.

EUR/USD is also under pressure, trading below 1.1650 following the European Central Bank's policy meeting, which failed to provide much support. Fed Chair Warsh's address at the Jackson Hole Symposium on Friday will be crucial for the pair's future direction. Gold remains close to its weekly low, while cryptocurrency prices are generally on the rise, with Bitcoin near $80,000, Ethereum above $2,500, and Ripple above its key support level of $1.40.

The US diesel crack spread has surged above $100 per barrel for the first time, indicating a different narrative in the oil market.