Japanese Yen builds on its weekly bullish gap-up against USD
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The Japanese Yen jumps back closer to last week’s swing high against its American counterpart. Retreating US bond yields prompts some USD profit-taking and benefits the lower-yielding JPY. The BoJ uncertainty and the risk-on mood might cap any further gains for the safe-haven JPY. The Japanese Yen (JPY) strengthens against its American counterpart at the start of a new week, dragging the USD/JPY pair back below the 154.00 mark during the Asian session. The US Treasury bond yields fell sharply in reaction to Scott Bessent’s nomination as US Treasury Secretary. This, in turn, prompts traders to lighten their US Dollar (USD) bullish bets after the recent rally to a two-year high and drives some flows towards the lower-yielding JPY. That said, the uncertainty tied to the Bank of Japan’s (BoJ) rate-hike plans, along with the prevalent risk-on environment, could cap any meaningful appreciating move for the safe-haven JPY. Moreover, expectations that US President-elect Donald Trump’s policies could reignite inflation and restrict the Federal Reserve (Fed) to cut interest rates slowly might act as a tailwind for the US bond yields. This, in turn, favors the USD bulls and should offer support to the USD/JPY pair. Japanese Yen benefits from retreating US bond yields and a weaker US Dollar US President-elect Donald Trump nominated prominent investor Scott Bessent – a fiscal conservative – as Treasury Secretary, reassuring the bond market and pulling yields lower across the board. The US Dollar, having risen for eight weeks in a row, retreats from its highest level since November 2022 as traders opt to take some profits off the table following the post-US election blowout rally. Despite stronger consumer inflation data from Japan and Bank of Japan Governor Kazuo Ueda’s hawkish remarks, domestic political uncertainty could restrict the BoJ from tightening its monetary policy. Meanwhile,…
Filed under: News - @ November 25, 2024 3:14 am