USDJPY:
The Japanese yen (JPY) is trying to capitalise on the gains recorded against its US counterpart over the past three days and attracted fresh sellers during Tuesday’s Asian session. Investors remain uncertain about the likely timing of when the Bank of Japan (BoJ) will raise rates again. In addition, reports that US President-elect Donald Trump’s top economic advisers are considering a slow rate hike are bolstering investor confidence and undermining the safe-haven yen.
Bank of Japan Deputy Governor Ryozo Himino said on Tuesday that while the direction of further rate hikes is favourable, the central bank should keep a close eye on various upside and downside risks at home and abroad.
In addition, the Federal Reserve’s (Fed) sentiment has dashed hopes of an immediate narrowing of the yield differential between the US and Japan and is seen as another factor acting as a headwind for the yen. This, in turn, is helping the USD/JPY pair to pause the pullback from the multi-month peak reached last Friday. Meanwhile, easing fears of crippling trade tariffs under Donald Trump are causing a moderate pullback in US Treasury yields, which is keeping the US Dollar (USD) below a two-year high and could limit the pair ahead of the release of the US Producer Price Index (PPI).
Trade recommendation: Trading mainly with Buy orders from the current price level
Origin: FreshForex
