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The prevailing trend leans towards selling the yen
resulting in the USD/JPY pair climbing from the mid-142 yen range to around 142.80 yen.
“In the ever-evolving forex arena, a prevailing inclination towards yen selling is evident, propelling the USD/JPY pair from the mid-142 yen range to approximately 142.80 yen”
The persistent decline in US bond yields, witnessed from the Tokyo morning to the afternoon, witnessed a temporary halt, resulting in a respite from the selling pressure on the dollar. As we approach the Bank of Japan meeting scheduled for tomorrow and the subsequent revelation of its outcomes, a shift in market sentiment has materialized, primarily propelled by adjustments to yen-buying positions accumulated during the recent phase of yen appreciation.
Speculation surrounding the Bank of Japan meeting has triggered discussions, particularly among foreign investors, regarding the potential normalization of negative interest rates. However, insights from domestic sources indicate that any signals indicating the removal of negative interest rates are more likely to transpire in the January meeting, with subsequent considerations for March or April. This perspective has gained international recognition, fostering an environment conducive to yen selling.
Across various yen pairs, there is a noticeable and widespread trend of yen selling. The Euro-to-yen pair, hovering around 155 yen during the Tokyo morning, gradually ascended in the Tokyo afternoon, reaching as high as 155.90 yen upon entering the London market.
The Euro-to-dollar pair underwent an upward adjustment following the euro-selling pressure observed at the end of the previous week. This upward trajectory, originating from the Tokyo market, extended to around 1.0930 in the early London session. However, a minor correction ensued after the release of results for Germany’s Ifo Business Climate Index, which fell below expectations, settling around the 1.0900 level.
The market remains dynamic and attuned to various factors, with the prevailing momentum favoring yen selling. As the Bank of Japan meeting approaches, market participants are vigilantly monitoring developments, with keen attention to potential shifts in policy and their ramifications for the forex landscape.
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