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    USD/JPY inter-market: Yen continues to rise on safe-haven demand Haresh Menghani

    Risk aversion dominated the opening hours of trading on Monday, with the USD/JPY pair extending its fall from Friday's high of 107.16 and dropped below 106.00 handle before finding a balance area around 105.90-106.00 region.After bottoming out near 105.75, improvement in risk appetite, as depicted by a fall in the Volatility index (VIX) and a minor recovery in the US 10-year treasury yields, assisted the pair to stage a tepid recovery from session through levels. Meanwhile, continuous downslide in the Japanese 10-year treasury yields and negligible change in the he Fed fund rate hike expectations, as revealed by CME Group's Fed Fund futures, have failed to provide any direction to the USD/JPY pair.On the other hand, rising concerns over 'Brexit' and its implication on the UK economy, following the release of latest poll results, might continue drive nervous investors towards the perceived safe-haven currency, Japanese Yen, and hence might restrict further recovery for the pair. Moreover, investors are also positioning themselves cautiously ahead of the key monetary policy meetings from the US and Japan on Wednesday and Thursday.A fresh tide of risk-aversion, triggering a rise in volatility and leading to a renewed sell-off in global stocks, would continue boosting the Japanese currency and drag the USD/JPY pair back towards retesting May 3 low level of 105.55. Alternatively, subsiding VIX would trigger a risk-on recovery for the pair immediately towards 106.75-80 immediate resistance area.


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