Yen fell on Tuesday against a basket of major rivals, extending losses for the second day against the dollar and backing off four-week highs on profit-taking, as markets await confirmation of the BOJ’s suspected intervention in the forex market last Friday.
Dollar’s gains are stymied by less aggressive remarks by Fed Chair Jerome Powell this week, which boosted the odds of multiple rate cuts this year.
The Price
The USD/JPY pair rose 0.5% today to 158.73, with a session-low at 157.98.
The yen lost 0.1% on Monday, the first loss in three days away from four-week highs at 157.17 yen per dollar.
BOJ Intervention
Bank of Japan’s daily operations data showed it spent upwards of nearly $22 billion on Thursday to prop up the currency.
The yen marked strong gains against most major rivals even on Friday, raising speculation it might have intervened once again on Friday.
The BOJ spent nearly $61.55 billion in late April to boost the yen and intervene back then.
US Rates
Fed Chair Jerome Powell said in an earlier speech in Washington that latest consumer prices data bolsters confidence that inflation is returning to the 2% target sustainably, with three consecutive readings presenting better than expected results.
Following the remarks, the odds of a 0.25% September rate cut by the Federal Reserve rose to a full 100% according to the Fedwatch tool, with a similar 100% likelihood of a rate cut in November.
Apple’s stock price surged on Monday to a record high, extending gains for the second straight session amid expectations of a new surge in sales and profits as Apple integrates AI technology into the iPhone 16.
Apple’s stock is up over 20% this year, bringing the company’s value to $3.62 trillion and making it the world’s most valuable publicly trading company once more.
And several Wall Street analysts have \upgraded Apple’s stock price target even further for this year.
The Price
Apple’s stock price rose 2.9% today to $237.23, a record high, with a session-low at $233.3.
At Friday’s close, Apple’s stock was up 1.3%, resuming gains after a short hiatus on Thursday.
Apple’s stock gained 1.9% last week, the third weekly profit in a row on strong purchasing sentiment.
Value Surge
Apple added nearly $300 billion to its market value since announcing plans to integrate AI technology into the new iPhone 16, which investors are now betting will lead to a surge in purchases.
Apple Intelligence
Apple has called the new technology “Apple Intelligence”, and it’s a reworking of the digital assistant Siri, with a suite of new services for its current base of phones estimated at 2.2 billion worldwide.
Apple is trying to catch up to Google and Microsoft-backed Open AI with the new tech, while convincing clients to upgrade their phones to use the new tech.
Upgrading the Stock
Several analysts recently upgraded Apple’s target price by $130 to $300 due to the new AI technology announcements.
Apple now has a chance to become a serious player and beneficiary in the AI sector.
Morgan Stanley’s Upgrade
Analysts at Morgan Stanley expect the new AI technology to boost Apple’s sales considerably, with potential sales of 500 million iPhones in the next two years.
That’s a massive upgrade from Morgan Stanley’s previous forecasts of 230 million-235 million iPhones of total sales in the next two years, with the bank upgrading the price target to $273.
Copper prices fell on Monday even as the dollar stabilized against most major rivals as markets assess global demand outlook.
Copper inventories at the London Metals Exchange reached 195,475 tonnes, the highest since October 2021, with stocks surging as well in South Korean and Taiwanese inventories.
Copper three-month cash contracts are trading with a $161.41 discount a tonne at the London Metals Exchange, the steepest such discount since 1982, and a sign of a glut.
Traders noted there’s no demand from China so far, so there’s no cash pricing.
The weak demand in China is brought into a brighter contrast following recent disappointing data, however the data raised hopes of more stimulus measures by the government soon.
Nickel inventories also rose to 98.088 tonnes in London, the highest since January 2022 as Indonesian production increases and consumption tapers off.
On the other hand, tin inventories dipped to 4450 tonnes at the London Exchange, and April low.
Otherwise, the dollar index fell 0.1% as of 16:15 GMT to 104.04, with a session-high at 104.3, and a low at 104.03.
On trading, copper September futures fell 0.8% as of 16:09 GMT to $4.55 a pound.
The US dollar gained ground in European trade on Monday against a basket of major rivals, about to mark the first profit in four days on haven demand after a failed assassination attempt on ex-President Donald Trump.
The developments came ahead of an important speech later today in Washington by Fed Chair Jerome Powell on inflation and the future of interest rates.
The Price
The dollar index rose 0.25% today to 104.32, with a session-low at 104.07.
The index closed down 0.4% on Friday, the third loss in a row, with a five-week low at 104.04 as US treasury yields continue to sustain losses.
The index gave up 0.8% last week, the second weekly loss in a row on the increasing odds of two US interest rate cuts this year.
The gains come after a failed assassination attempt on ex-US President Donald Trump in a rally during the weekend.
The attempt boosted Trump’s odds of winning the elections, with investors viewing Trump’s flexible fiscal policies and support for raising tariffs as beneficial for the dollar, but potentially weakening for US treasury bonds.
US Rates
According to the Fedwatch tool, there’s a 94% chance of a Fed rate cut in September, and a 98% chance of such a cut in November.
Powell
Now investors await a crucial speech by Fed chair Jerome Powell later today in Washington DC to gauge the likely path ahead for policies.
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