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    USD/JPY intermarket: Still down despite risk appetite Matías Salord

    USD/JPY moved off session lows during the last hours but is still about to end the day in negative territory near 107.00. Risk appetite failed to weaken the yen in the market. Risk off during the Asian session boosted the Japanese currency that despite the recovery in main stock indexes held to gains in the forex market.The Dow Jones and the S&P 500 are up 0.38%, the Global Dow gains 0.56% and the VIX index (fear gauge) falls 0.78%; despite the risk on environment USD/JPY trades at 106.90, 35 pips off daily lows but sill far from yesterday’s closing price. US bond yields (10-yr fell from 1.72% to 1.71%) declined marginally.A week from Fed’s decisionIn exactly seven days, Janet Yellen will be holding a press conference following the statement and new macroeconomic projections from the FOMC staff. Market expectations about a rate hike in June dropped sharply after Friday’s employment report, explaining the recent decline of the USD/JPY pair.A rate hike would be a surprise next Wednesday and would trigger an upside movement in US bond yields, favoring the upside in USD/JPY. If the decision is to hold rates unchanged, bond yields trajectory could depend on the words of the statement and also of the bias from Yellen; signals about a July rate hike could also benefit the US dollar.USDJPY   


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