20 November 2024, USD/JPY
USDJPY:
On Tuesday, the Japanese Yen (JPY) demonstrated robust two-way price movements, with minimal fluctuations against its US counterpart by the end of the trading day. Russia's announcement that it will lower the threshold for a nuclear strike has prompted a flight to safety into the Japanese Yen. The global flight to safety resulted in a significant decline in US Treasury bond yields, which further impacted the low-yielding yen. This led to the USD/JPY pair reaching a weekly low of around 153.30-153.25. However, the initial market reaction diminished rather rapidly following comments from Russian and US officials that helped assuage concerns about the potential for a full-scale nuclear war.
Furthermore, the timing of further monetary tightening by the Bank of Japan (BoJ) continued to create uncertainty and overshadow the modest weakening of the US dollar (USD). Following the release of Japan's trade balance data, the Yen remains under pressure, with the USD/JPY pair consolidating on the solid intraday recovery of more than 150 pips achieved overnight. Nevertheless, speculation that Japanese authorities may intervene in the FX market to support the local currency, coupled with geopolitical uncertainty, may deter those betting against the Japanese yen and serve as a headwind for the pair.
Trade recommendation: We follow the level of 155.00, when fixing above it we consider Buy positions, when rebounding we consider Sell positions.
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