- The USD/JPY recovers some of its intra -losses while the US dollar struggles to gain temporary ground.
- The US dollar has remained weak due to multiple winds against.
- The box is expected to continue raising interest rates.
The USD/JPY pair recovers some of its intra -ease losses but continues to quote about 140.65 during the North American negotiation hours on Tuesday. The asset has demonstrated a downward movement pronounced in the last two weeks and has reviewed the minimum of 21 months about 139.60.
The torque has remained weak since the ads of round trip rates by the president of the United States (USA) Donald Trump and his confrontation with the president of the Federal Reserve (Fed) Jerome Powell have affected the credibility of the US dollar.
During the North American negotiation hours, the American dollar index (DXY), which tracks the value of the dollar against six main currencies, attracts some offers and bounces about 98.50, but remains close to the minimum of three years of 98.00.
Meanwhile, the Japanese Yen (JPY) has had a good performance since global economic uncertainty due to the lack of clarity on Trump’s rates has improved its attractiveness as a safe refuge.
In addition, the firm expectations that the Bank of Japan (BOJ) upload interest rates again this year have also strengthened Yen. The BOJ is expected to continue supporting the increases of interest rates, said a Reuters report. The agency reported that the highest risks of higher US rates would not divert a cycle of salary and inflation increase that is considered crucial to continue raising interest rates.
The USD/JPY quotes at a critical point near the psychological level of 140.00. The prospects of the torque are strongly bassist since the 20 -day exponential mobile average (EMA) is inclined downward, quoting around 144.80.
The 14-day relative force (RSI) index oscillates in the bassist range of 20.00-40.00, indicating a strong downward impulse.
The asset would face more falls towards the minimum of July 28, 2023 of 138.00 and the minimum of July 14, 2023 of 137.25 after sliding below the minimum of September 16, 139.58.
On the other hand, a recovery movement above the maximum of April 21, 142.15 will lead to the asset towards the maximum of April 16, 143.28, followed by the minimum of April 9, 144.00.
USD/JPY DAILY GRAPH
And in Japanese faqs
The Japanese Yen (JPY) is one of the most negotiated currencies in the world. Its value is determined in general by the march of the Japanese economy, but more specifically by the policy of the Bank of Japan, the differential between the yields of the Japanese and American bonds or the feeling of risk among the operators, among other factors.
One of the mandates of the Bank of Japan is the currency control, so its movements are key to the YEN. The BOJ has intervened directly in the currency markets sometimes, generally to lower the value of YEN, although it abstains often due to the political concerns of its main commercial partners. The current ultralaxy monetary policy of the BOJ, based on mass stimuli to the economy, has caused the depreciation of the Yen in front of its main monetary peers. This process has been more recently exacerbated due to a growing divergence of policies between the Bank of Japan and other main central banks, which have chosen to abruptly increase interest rates to fight against inflation levels of decades.
The position of the Bank of Japan to maintain an ultralaxa monetary policy has caused an increase in political divergence with other central banks, particularly with the US Federal Reserve. This favors the expansion of the differential between the American and Japanese bonds to 10 years, which favors the dollar against Yen.
The Japanese Yen is usually considered a safe shelter investment. This means that in times of tension in markets, investors are more likely to put their money in the Japanese currency due to their supposed reliability and stability. In turbulent times, the Yen is likely to be revalued in front of other currencies in which it is considered more risky to invest.
Source: Fx Street
I am Joshua Winder, a senior-level journalist and editor at World Stock Market. I specialize in covering news related to the stock market and economic trends. With more than 8 years of experience in this field, I have become an expert in financial reporting.
