Return to Insights

Morning Update

Word of the week Wednesday, continued weakening of the Yen despite central bank intervention, residential properties rise by 0.6% on an annualised basis, and Amazon beats expectations with bumper earnings.

Word of the Week Wednesday

First-past-the-post: a voting method where voters vote for a single candidate and the candidate with the largest number of votes wins.
The elected person needs only to secure a plurality – or highest number of votes, rather than a majority (over 50%) or say a super majority.
Since it is considered as a ‘winner takes all’ method (on a constituency basis), political parties’ representation by number of seats (on a national basis) may not reflect their share of the popular vote. As such, parties with a less concentrated base may find it harder to pick up seats. This plurality voting system is thought to have been used to elect members of the House of Commons since the Middle Ages.


In Japan: policymakers are having to be creative after a continued weakening of the Yen hasn’t been stopped by central bank intervention in FX markets.

In a turbulent few days, the Bank of Japan was forced to intervene and directly buy $35bn worth of Yen in the FX markets on Monday to try and prop the currency up.

The move came after the currency fell to a long-term low last Friday when policy makers kept interest rates on hold and gave no indication they’d be raising them anytime soon. This sentiment isn’t helpful when their central bank peers have rates 4-5% higher than the BoJ.

The market intervention has only worked briefly, and the Yen is back on the ropes.

Now, policymakers are considering offering tax breaks to Japanese companies that repatriate overseas profits and convert them back to the Yen. This persistent Yen buying would naturally prop up the currency and save the central bank using its own FX reserves – which are no doubt plentiful, but ultimately finite.

Much like the UK’s FTSE100, the Nikkei is made up of companies that generate a huge amount of profit outside of their home country. This means that a weak reporting currency (Yen) makes overseas profits and assets more valuable when revalued coming reporting time and as such has been partly responsible for the Nikkei index hitting record highs.

We’d hypothesise that a tax break would be supportive of share prices for a time, but if this were to strengthen the Yen then we could see the market normalise a little as the value of foreign earnings deflates. If this were to happen, we also think it’s going to take some time to legislate and that the Yen might have a rocky road ahead of it.

Nationwide House Price Index

The latest nationwide house price index released this morning has indicated that residential properties have risen 0.6% on an annualised basis. This marks the third consecutive month where house prices rose on a year-on-year basis and comes in contrast to the period between February 2023 and January 2024 which saw 12 consecutive months of house prices retreating.

While annualised house prices rose in April, they did so at a slower pace than both March (at 1.6%) and February (at 1.2%).

On a month-on-month basis, house prices fell 0.4%, again marking a rise in the rate of retreat from last month where prices fell 0.2%.

Citing the data, Nationwide’s Chief Economist Robert Gardner said that “The slowdown likely reflects ongoing affordability pressures, with longer term interest rates rising in recent months, reversing the steep fall seen around the turn of the year. House prices are now around 4% below the all-time highs recorded in the summer of 2022, after taking account of seasonal effects.”

With a recent report from Census wide on behalf of Nationwide suggesting that just under 50% of prospective first-time buyers were holding off their plans to buy over the past year, they same report commented how “55% of respondents said they would be willing to buy in another part of the country where house prices are cheaper”.

Amazon Earnings

In the US, Amazon announced bumper earnings after the closing bell yesterday, beating expectations by about 20%. The company saw very modest revenue growth, but earnings were bolstered by recent cost-cutting measures and efficiency drives – read 27,000 employees laid off since Q4 2022.

Despite the outsized win, the market was tepid with the stock, having moved it 3% lower before the closing bell and is up only around 1.5% in after-hours trading. The market will no doubt be impressed by what Amazon and its tech cohort are delivering, but these numbers are being offset by expectations that interest rates aren’t going lower anytime soon, which affects the future value of money and therefore decreases the future value of earnings.

Ready to talk FX?

Get in touch with one of our friendly and knowledgeable experts to see how FX strategy can drive commercial impact in your business.

Contact us


Find out how we have helped our clients meet their hedging requirements.

Protests in Georgia in Focus

Travel Tuesday, political turmoil in Georgia sees continued protests, application for an arrest warrant for Israeli Prime Minister and his Defence Minister announced by ICC Chief Prosecutor, and softer-than-expected German PPI.

Morning Update

Macro Monday, reports on helicopter crash that killed Iranian president, house prices continue to rise in the UK, new president sworn in for Taiwan, and what's happening this week.

Morning Update

Friday feeling, record highs for copper prices, Dow Jones surpasses 40,000 points for the first time in history, French unemployment holds at 7.5%, and today's focus on Eurozone inflation.

Morning Update

Though for Thursday, Xi visits Moscow to meet with Putin, Washington's tariffs have implications on China, latest inflation data from the US, and yesterday's attempted assassination on Robert Fico.

Inflation, Equities, and Billionaires

Word of the week Wednesday, US producer price index rises unexpectedly, yesterday's equity markets surpass previous peak, and proposed global minimum tax for the world's wealthiest billionaires.

UK Labour Data, Truth Social, and Ukrainian Grain in Focus 

Travel Tuesday, UK wage growth comes in line with previous month, rising UK unemployment, story emerges from US regarding Trump's social media company, grain shipping returns to pre-war levels for Ukraine, and Melinda Gates announces her leave from Gates Foundation.

Weekend Round-Up

Macro Monday, hopes to kickstart Chinese economy by issuing bonds, areas in Ukraine left devastated after renewed Russian attacks, and Trump promises tax cuts if he gets back into office.

GDP Indicates the UK’s Out of a Recession

Friday feeling, UK first quarter growth pulls UK out of recession, new tariffs on China from the Biden administration, a look at some all time best selling songs, and benchmark policy rate held by the BoE.

Find out more about our foreign exchange solutions
Contact us