Economy Forex News

USD/JPY pulls back from two-month highs near 111.45

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  • USD/JPY retreats amid return of risk aversion as energy crisis intensifies.
  • US dollar retreats on Treasury yields, Fed optimism continues to underpin USD.
  • USD/JPY remains at the mercy of yield dynamics and risk trends ahead of Powell.

USD/JPY pulls back from two-month highs of 111.43, although it remains well above the 111.00 level, as investors await Fed Chairman Jerome Powell’s testimony for further trading opportunities.

USD/JPY

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The pair has retreated as European equities take a hit amid the intensifying energy crisis in China and the eurozone. A spike in gas and oil prices has triggered an energy crisis in Europe, causing governments to warn of blackouts and factories to shut down. Meanwhile, China is experiencing power outages.

Despite the worsening market mood, demand for US Treasury bonds has recovered, preventing the rise in yields across the curve.

Japan’s Prime Minister Yoshihide Suga announced on Friday that state of emergency measures will be lifted on September 30.

The USD/JPY has climbed strongly recently, tracking the relentless rise in US yields amid the Fed’s upbeat shift, with markets now discounting an earlier-than-expected rate hike in pricing.

Recent upbeat comments from Fed policymakers have also lent support to yields. With the US rate hike, the US dollar has advanced further, supporting gains in the USD/JPY pair.

Treasuries yields reached a three-month high of 1.55% before retreating to 1.53%, where they are now waffling.

Market sentiment and yield dynamics will continue to influence USD/JPY. The Bank of Japan’s yield curve control policy keeping the 10-year yield at 0%, has offset the impact of somewhat sourer sentiment caused by concerns about a debt crisis in China’s Evergrande construction giant, which offered support to the safe haven Japanese yen.

USD/JPY is trading at 111.27, up 0.26% on the day.

USD/JPY additional levels

Last Price 111.27
Daily Rate 0.26
Daily Rate % 0.23
Open 111.01

TRENDS
20 Daily SMA 109.94
50 Daily SMA 109.91
100 Daily SMA 109.92
200 Daily SMA 108.3

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Michelle D. Madsen

Michelle D. Madsen graduated from the University of Westminster and has been deeply involved in the world of finance ever since. She has worked as a Broadcast Journalist hosting various news shows and informative webcasts about the financial markets. Since 2004 she has also been writing for Metanews daily, her attention to detail, and her in-depth knowledge of the financial markets have led her to cover Foreign Exchange and commodities. The world of finance has changed in the last few years with the introduction and rising popularity of cryptocurrencies. She has in no means been left behind, adding this to her bank of intellect and is now also an expert in cryptocurrencies. For the last ten years, Ms. Madsen has been engaged in the financial market. She has notedly written a great number of incredibly informative reviews for the crypto exchange and forex brokers. Her wealth of knowledge has enabled her to become a leading expert in the field. She continues to inform the public writing up-to-date, thorough reviews for the readers of Metanews as she has for the last decade.
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