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Morning Yen Selling Continues without Momentum
The USD/JPY pair, after reaching the significant 145 yen level in the Tokyo market last Friday.
“Lack of Momentum Persists in Morning Yen Selling”
The USD/JPY pair, having breached the significant 145 yen level in the Tokyo market last Friday, underwent a minor correction and concluded the week’s trading within the mid-144 yen range. As the sense of accomplishment in surpassing this crucial threshold lingered, the pair commenced the new week at a comparable level. While it briefly reached 144.23 yen with a marginal upward bias in the morning, the subsequent trend favored a robust US dollar and a weakening yen.
During the morning session, the Nikkei average exhibited resilience, bolstered by expectations of improved US-China relations. As a result, mainland Chinese and Hong Kong stocks recorded substantial gains, spurring an upsurge in yen selling driven by risk appetite. The USD/JPY pair climbed to 144.60 yen before noon, subsequently trading within a narrow range in the higher price zone, touching 144.69 yen.
However, a correction ensued, causing the pair to decline to the 144.30 yen level. In the afternoon, Japanese long-term bond yields surged, propelling the 10-year yield to the 0.4% range for the first time since June 16. This development prompted an increase in yen buying activity.
On the other hand, the Australian dollar faced initial selling pressure due to expectations that the Reserve Bank of Australia would maintain unchanged interest rates at tomorrow’s policy meeting. Consequently, it slipped below 0.6637 against the US dollar and dipped below 96 yen against the Japanese yen. Nonetheless, the prospect of improved US-China relations enticed buying interest in the Australian dollar, leading to a sharp rebound. The AUD/JPY pair briefly recovered to the 96.40 yen level, while the AUD/USD pair reached the 0.6670 range.
Meanwhile, EUR/USD exhibited a relatively stable performance throughout the morning, trading within a range of 17 points between 1.0901 and 1.0918. EUR/JPY, influenced by the rebound in USD/JPY, rose to the 157.80 yen level before noon. Nevertheless, subsequent selling pressure prompted a correction in the pair.
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