The yen’s unexpected morning rise

Traders in Europe are bracing themselves for a volatile day ahead as the yen’s dramatic reversal from its slide past 160 per dollar has sparked speculation of possible intervention by Tokyo. The currency, which hit a session-high of 156.55 per dollar, made a sharp turnaround just hours after reaching a 34-year low.

While Japanese authorities have denied targeting specific levels for the yen, recent comments from the Liberal Democratic Party suggest that the 160 level could be a tipping point. With the currency already sliding 5% this month, market watchers are on edge for any signals from authorities.

In addition to the currency market turmoil, Germany’s preliminary inflation figures for April are set to be released, offering insight into the wider bloc’s economic health. This data could influence market expectations for the European Central Bank’s upcoming rate decisions.

Meanwhile, all eyes are on the Federal Reserve’s two-day policy meeting ending Wednesday, where Fed Chair Jerome Powell is expected to provide guidance on the central bank’s rate outlook. With strong economic data coming out of the U.S., market pricing for a September rate cut is gradually diminishing.

In the world of electric vehicles, Tesla CEO Elon Musk’s unannounced visit to Beijing has raised speculation about the company’s expansion plans in China. Musk’s discussions on the rollout of Full Self-Driving software and data transfer permissions could have implications for Tesla’s future growth.

Overall, Monday promises to be a day of uncertainty and anticipation in European and global markets as traders navigate through a complex web of economic data and geopolitical developments.