【True Zoom Finance】April 25 Noon Brief: Yen Hits 34-Year Low! Falls to 'Bottom Line' - Is Bank of Japan About to Intervene?

"The yen continued to weaken against the US dollar, with the USD/JPY exchange rate rising above 155 for the first time since June 1990. The persistent weakness of the yen may prompt Japan's Ministry of Finance to intervene in the yen's movement. Meta's second-quarter revenue forecast disappointed the market, causing its after-hours stock price to drop over 16%; Tesla surged 12% after earnings! While retail investors celebrated, investment banks remained slightly cautious."

Key News

Meta's Second-Quarter Revenue Forecast Disappoints the Market, After-Hours Stock Price Drops Over 16%$Meta Platforms(META.US)

l Meta released its first-quarter earnings report. Although both revenue and profits exceeded expectations, the disappointing second-quarter forecast caused the company's after-hours stock price to plummet over 18%.

l Meta's first-quarter earnings per share were $4.71, compared to the expected $4.31; revenue reached $36.45 billion, versus the expected $36.14 billion; net profit was $12.369 billion, compared to the expected $11.377 billion; advertising revenue for the quarter was $35.64 billion, versus the expected $35.57 billion. On April 24, Meta closed slightly down 0.52%, with the latest market capitalization at 9.1 trillion yuan.

l Notably, Meta expects second-quarter revenue to be between $36.5 billion and $39 billion, compared to the expected $38.24 billion. The after-hours stock price once dropped over 18%.

Tesla Surges 12% After Earnings! While Retail Investors Celebrate, Investment Banks Remain Slightly Cautious$Tesla(TSLA.US)

l On Wednesday (April 24), U.S. electric vehicle manufacturer Tesla's stock price reached a high of $167.97 per share during the day, with gains approaching 16%. By the close, Tesla had surged over 12%, with its market capitalization returning above $500 billion.

l Tesla's earnings report released after hours showed that the company recorded $21.3 billion in revenue for the first quarter, a 9% year-over-year decline—the first such drop since early 2020; net profit was $1.129 billion, down 55% year-over-year; adjusted earnings per share were $0.45, all below market expectations.

l However, Musk staged a "major reversal" during the presentation, showcasing a ride-hailing program to be integrated into Tesla products and announcing an earlier release of new models. The robotaxi network under development is also progressing well. Musk also emphasized that Tesla is an AI robotics company, not a car company.

l Musk also boldly stated that if anyone believes Tesla cannot solve autonomous driving, they should not be investors in the company. Media analysis suggests Musk downplayed most of the earnings report, successfully diverting investors' attention elsewhere.

l After the earnings report, Bank of America Securities upgraded Tesla's stock rating from "neutral" to "buy" and set a target price of $220. Analyst John Murphy believes positive catalysts are emerging, and Tesla has largely cleared the bad news. If the company follows its development plan, the stock price will rise significantly.

l However, Bank of America's view remains in the minority, as several investment banks chose to lower their target prices for Tesla. UBS reduced its target from $160 to $147, already below the current stock price; the "long-term bull" Wedbush also lowered its target from $300 to $275.

Yen Hits 34-Year Low! Falls to "Bottom Line"—Will the Bank of Japan Intervene?$Currencyshares JPY Trust(FXY.US)

l On April 24, the yen continued to weaken against the US dollar, with the USD/JPY exchange rate rising above 155 for the first time since June 1990. The persistent weakness of the yen may prompt Japan's Ministry of Finance to intervene in the yen's movement.

l When will authorities intervene amid the yen's weakness?

l During Wednesday's Asian trading session, the USD/JPY exchange rate remained stable. Entering the European and U.S. trading sessions, the yen began to weaken continuously, with the USD/JPY exchange rate quickly breaking through the 34-year high of 155. The yen also weakened against other major currencies. The EUR/JPY exchange rate hit a record high of 165.8580, while the GBP/JPY exchange rate approached a 10-year high of 193.53.

l USD/JPY, EUR/JPY, and GBP/JPY trends (from June 2022 to present)

l The yen's continuous weakening has drawn global attention, but Japanese authorities have only verbally intervened recently without taking concrete action.

l Japan's Finance Minister Shunichi Suzuki stated that measures to "address disorderly foreign exchange fluctuations" have not been shelved. Vice Finance Minister for International Affairs Masato Kanda also said they are closely and urgently monitoring the yen's movement. Reports indicate that Chief Cabinet Secretary Yoshimasa Hayashi similarly stated that authorities do not rule out any measures to address excessive currency volatility, echoing other government members' remarks that they are highly focused on currency fluctuations.

l Research institutions had long anticipated Japanese authorities' intervention in the exchange rate. In March, when the USD/JPY exchange rate broke through 150, Standard Chartered Bank released a report stating that the yen's exchange rate level was nearing Japan's "critical line" for intervention.

Today's Forex and Commodity News

EUR/USD: Euro Hovers Near 1.0700, Awaiting U.S. Q1 GDP Data

l U.S. March durable goods orders rose 2.6% month-over-month, compared to the previous 0.7% increase; core goods rose 0.2% month-over-month, below expectations.

l The European Central Bank (ECB) insists on its plan to cut rates this year, with its dovish stance weighing on the euro.

l Traders will focus on the release of U.S. Q1 GDP data.

l During early Asian trading on Thursday, the EUR/USD pair hovered near the psychological level of 1.0700. A weaker U.S. dollar supported a slight rise in the pair. Later in the day, Germany will release its April GfK consumer confidence survey. Additionally, the U.S. will release its preliminary GDP figures.

l Data released by the U.S. Commerce Department on Wednesday showed that U.S. March durable goods orders rose 2.6% month-over-month, compared to the previous 0.7% increase and above the expected 2.5%; core goods (excluding transportation) rose 0.2% month-over-month, below the expected 0.3%.

l U.S. Q1 GDP may provide clues about the strength of economic growth and indicate the Federal Reserve's next steps. If the report shows stronger-than-expected data, it could spark speculation that the Fed will delay its rate-cutting cycle and boost the U.S. dollar. According to the CME FedWatch Tool, markets have priced in a nearly 70% chance of the Federal Reserve cutting its benchmark rate in September.

l Across the Atlantic, ECB policymakers insist on their plan to cut rates this year, even as rising U.S. inflation may delay the Fed's shift to easing. ECB President Christine Lagarde stated that the ECB may cut its deposit rate from a record high of 4% in June but remains open to further actions. The ECB's dovish stance has put some selling pressure on the euro (EUR) and created headwinds for the EUR/USD pair.

Precious Metals: Gold/USD Outlook—Gold Maintains Constructive Bias Above $2,300, Awaiting U.S. Key Data for New Signals

l After falling nearly 3% over the past two days, gold prices traded in a narrow range on Wednesday, having briefly fallen below the psychological support level of $2,300 but failing to sustain a break below the daily Kijun-sen ($2,289).

l Tuesday's movement formed a hammer candlestick, signaling a preliminary limited pullback reversal, which can now be described as a healthy correction.

l Additionally, a bear trap below the rising 20-day moving average (20DMA) could further strengthen the signal, though more upward action is needed for confirmation.

l As long as prices remain above $2,300, the near-term bias is expected to stay bullish, with repeated closes above the 20DMA ($2,324) reinforcing the near-term structure, accelerating toward $2,340 (38.2% Fibonacci level of $2,417/$2,291), and closing above the 10DMA ($2,358) to confirm the reversal.

l The 14-day momentum has reversed above the midline, pointing to existing bullish momentum, while the RSI remains above the neutral 50 zone.

l Caution is advised for a firm break below the key support levels of $2,300 and $2,289, as such a break would increase the risk of further pullbacks.

l Markets are focused on key U.S. economic data this week (Q1 GDP and the Fed's preferred inflation gauge, the PCE price index, to be released on Thursday), which will provide more clues about the Fed's rate path and generate new signals for gold.

Crude Oil: Oil Prices Dip Slightly as U.S. Economic Data Cools and Middle East Conflict Concerns Ease

l Although a decline in U.S. crude inventories laid the groundwork to halt the drop in oil prices, concerns over the Middle East conflict eased, and U.S. business activity slowed, leading to a decline in oil prices. #CrudeOilClose

l WTI June crude oil futures fell $0.55 per barrel, or 0.66%, to close at $82.81 per barrel. At the time of writing, the price was $82.88 per barrel, down 0.58%.

l The reduction in geopolitical risk premiums overshadowed the American Petroleum Institute's optimistic inventory data. In contrast, oil spreads continued to tighten. Meanwhile, the U.S. Senate approved a bill last night that would expand sanctions to include foreign ports, vessels, and refineries that knowingly process or transport Iranian crude oil in violation of existing U.S. sanctions.

l Tim Snyder, an economist at Matador Economics, said, "The fundamentals we're trading seem to favor a slightly more stable Middle East."

l Goldman Sachs analysts said in a report that the easing of tensions between Iran and Israel could lead to a further drop of $5–$10 per barrel in the coming months. These analysts estimate Brent crude's ceiling at $90 per barrel.

l Expectations that major central banks will cut rates to support economic growth—thereby stimulating fuel consumption—and an unexpected decline in U.S. crude inventories last week helped limit the downside for oil prices.

l Data released by the U.S. Energy Information Administration (EIA) showed that U.S. crude oil inventories for the week ending April 19 recorded their largest drop since the week ending January 19, 2024; U.S. strategic petroleum reserve inventories for the same week recorded their largest increase since the week ending January 26, 2024, marking the 19th consecutive week of gains.

l U.S. oil inventories fell by 6.37 million barrels last week to 453.6 million barrels. The decline was larger than most analysts expected and the biggest since January, narrowing the losses for WTI and Brent crude. As Middle East geopolitical risks began to ease, oil prices retreated from recent highs above $90 per barrel. Meanwhile, the U.S. Senate passed tougher measures against Iran in response to its attack on Israel earlier this month. While some Asian refiners are preparing for stricter scrutiny, the move is not expected to significantly impact the market. Time spreads indicate tightening oil market conditions, with the spread between Brent's two nearest contracts widening to $1.05 per barrel, in backwardation.

l Russia's Ministry of Economy expects crude oil exports to reach 240 million tons (about 4.82 million barrels per day) this year, slightly higher than last year's 238 million tons. Flat exports this year are mainly due to the country's agreement to extend production cuts under the OPEC+ plan to balance the oil market. The cuts will last until the end of the year. Reports suggest Russia may gradually increase overseas shipments to 247 million tons in 2025 and 257 million tons the following year.

Source: Goldhorse Capital Extramile