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The yen dropped more than 10% against the dollar in seven weeks. The yen fell further on Thursday when the Governor of the Bank of Japan Haruhiko Kuroda doubled down on his ultra-easy settings with plans for fixed-rate bond purchases every day to keep yields in check. However, the extreme moves in the yen triggered an official from Japan's finance ministry to comment the move in the yen past the 131 mark, warrants extreme concern. But so far, policymakers have only made verbal interventions. Until Japan decides to sell some of its gigantic foreign currency reserves to buy the yen, (or change its policy), it is clear for investors that the yen will remain an easy target to sell. 

The euro is now at a five-year low against the dollar. The deterioration in the Ukraine war, the prospect of lower Chinese growth, and the fed's aggressive tightening tone are all presenting major headwinds to Europe's common currency. And if that is not enough, yesterday Russia, an major EU energy exporter, announced to stop deliveries to Poland and Bulgaria, a move that is increasing the risks of pushing the continent into recession. Will the March 2020 hold? Or are we set to see the pair fall to 2016 lows...

The EURUSD gained post German inflation data (PPI) and ahead of the key debate of the French election. Traders are increasing bets that the European Central Bank could raise interest rates sooner than currently priced in by the market. German PPI jumped to 30.9% YoY in March, boosted by a surge in energy prices. Looking ahead, the market will focus on the French election and any sense that Le Pen is gaining in popularity could drag the euro lower. On the technical picture, buyers would need to retake (and hold) the resistance at 1.0840. Meanwhile, support can be seen at 1.0760.

The yen's weakness is going crazy! New highs on USDJPY are the order of the day. The pair has now risen on 13 consecutive sessions, the longest since the 1970s!  The ADX, a measure of trend strength, is now at its highest level since 1974. Reasons behind the weak performance: 1) slowdown in global growth is reducing the appeal of the yen, and 2) higher US yields are boosting the US dollar.  

The ECB vowed to maintain its stimulus exit, but not faster than it had said before, leading to the EURUSD selling off 0.2% to 1.0870. Net bond buying is set to end in the third quarter and main financing rate is kept unchanged. Money markets are now pricing in 64 basis points of rate hikes by year-end, around 7 bps lower than prior to the policy decision. More colors are expected later today at the ECB meeting.