Japanese Yen remains on the front foot against USD; upside potential seems limited
The post Japanese Yen remains on the front foot against USD; upside potential seems limited appeared on BitcoinEthereumNews.com.
The Japanese Yen attracts safe-haven flows and strengthens for the third straight day. The BoJ rate hike uncertainty might hold back the JPY bulls from placing fresh bets. Hawkish Fed expectations underpin the USD and lend support to the USD/JPY pair. The Japanese Yen (JPY) ticks higher against its American counterpart for the third successive day on Monday and moves away from a multi-month low touched last week. The risk-off impulse – as depicted by a weaker tone around the equity markets – turns out to be a key factor underpinning the safe-haven JPY. However, doubts over the BoJ’s rate hike plans should cap gains for the JPY. The broadening inflationary pressure in Japan keeps the door open for another BoJ rate hike in January or March. That said, some investors are betting that the BoJ may wait until April to seek confirmation that strong wage momentum will carry over into the spring negotiations. Furthermore, the recent widening of the US-Japan yield differential could also contribute to capping the JPY. Apart from this, the underlying bullish sentiment surrounding the US Dollar (USD), bolstered by expectations that the Federal Reserve (Fed) will pause its rate-cutting cycle, should act as a tailwind for the USD/JPY pair. In the absence of any relevant economic releases, the mixed fundamental backdrop warrants caution before positioning for any further JPY appreciating move. Japanese Yen draws support from the global flight to safety mode; lacks bullish conviction A mix of geopolitical tensions and rate jitters temper investors’ appetite for riskier assets, which, in turn, benefits traditional safe-haven assets and drives flows towards the Japanese Yen for the third straight day on Monday. The Office of Foreign Assets Control (OFAC) said on Friday that the US and the UK administration imposed tougher sanctions against Russia’s oil industry, targeting…
Filed under: News - @ January 13, 2025 3:19 am