top of page

Title : USD/JPY moves away from over one-week low, sits near daily peak around 139.00 mark

Writer's picture: analysiswatchanalysiswatch

November 25, 2022 04:22 AM ET

By:AnalysisWatch


The USD/JPY pair attracts some buying on Friday and partially recovers from the previous day's losses to near the 138.00 level, which is a week and a half low.


The pair managed to hold its intraday gains in the first half of the European session and is currently trading at the upper end of its daily range, just below the 139.00 mark.


The generally positive sentiment in the equity markets is weakening the safe-haven yen, which in turn is seen as a key factor supporting the USD/JPY pair. Apart from that, a rather dovish stance by the Bank of Japan is seen as a burden for the domestic currency and a tailwind for the dollar. However, the uptrend lacks bullish conviction and risks fizzling out rather quickly given the bearish sentiment surrounding the US dollar.


Minutes from the November meeting of the Federal Open Market Committee, released Wednesday, indicate that officials are largely content to move forward with rate hikes in smaller increments rather than bringing them forward.


This, in turn, cements bets on a 50 basis point rate hike at the next FOMC meeting in December and is highlighted by the continued decline in U.S. Treasury yields. The resulting narrowing of the interest rate differential between the U.S. and Japan benefits the JPY and prevents a significant recovery in the USD/JPY currency pair.


In addition, a rise in core consumer prices in Japan's capital, which hit its fastest annual rate in 40 years in November, cast doubt on the BoJ's view that recent cost-driven inflation will prove temporary. This may further discourage traders from placing aggressive bullish bets on the USD/JPY currency pair amid relatively low trading volumes. Therefore, it is advisable to wait for strong follow-through buying before confirming that spot rates have bottomed in the near term.



1 view0 comments

Comments


2b94f773-a237-4da7-a599-6b42314ed9e6.png

Risk Disclosure: AnalysisWatch will not accept any liability for loss or damage as a result of reliance on the information contained within this website including data, quotes, charts and buy/sell signals. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible. Currency trading on margin involves high risk, and is not suitable for all investors. Before deciding to trade foreign exchange or any other financial instrument you should carefully consider your investment objectives, level of experience, and risk appetite.
AnalysisWatch would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore AnalysisWatch doesn’t bear any responsibility for any trading losses you might incur as a result of using this data.

bottom of page