USDJPY Today - The USD/JPY currency pair has been performing sluggishly below the critical 149.00 hurdle in Tokyo. The asset has been moving sideways following the back-and-forth cues from the US dollar index (DXY). DXY’s juggling below 112.00 suggests that the market mood is very quiet. The S&P500 futures have recovered the marginal losses recorded in early Tokyo. Also, the US 10-year Treasury yield has extended its decline nearing 2.21%, which could bring a rebound in the risk-on impulse ahead. A knee-jerk reaction in an asset usually turns it into a sideways trend. The Bank of Japan’s (BOJ) intervention in the currency market against disorderly FX movements to protect the weakening yen has kept investors on the sidelines of the trend. The weakening of the domestic currency due to speculative movements has hurt the morale of Japanese investors. BOJ Governor Haruhiko Kuroda, a Japanese government official, said that “the recent sharp one-sided weakening of the yen is not good for the economy.” Japanese officials are paying ‘close attention’ to market volatility. Tokyo government continues to intervene in currency markets after yen hit a 32-year low.usdjpy today The impact of the weaker yen has had a negative impact on importers. From oil purchases to food, Japan has a constant demand for dollars, which are sensitive to yield differences, monetary policy expectations and technical levels reported by Bloomberg. Meanwhile, on the US side, investor focus has shifted to US Gross Domestic Product (GDP) data, due on Thursday. Annual GDP is expected to increase significantly to 2.4% vs. a previously reported 0.6% decline.
Key Points
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- USD/JPY continues to bid below 149.00 as investors await further clarity on BOJ intervention.
- S&P500 futures have recovered their morning losses suggesting that the risk-on impulse could be recovering.
- Japanese importers have been hit hard by the yen's fall to a 32-year low.
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