Japanese Yen Falls as Bond Yields Rise

Dan Blystone TradersLog.com

The Japanese Yen fell to its lowest levels against the US dollar since the beginning of August in early trading on Tuesday. The move came amid shifting investor sentiment towards riskier assets.

US Treasury yields rose to three-week highs on Monday and on Tuesday Germany’s 30-year government bond yield entered positive territory for the first time in more than a month. Rising yields on government bonds reflect falling bond prices and a decrease in demand for bonds as investors move to riskier assets such as stocks.

Optimism over improving trade relations between the US and China and expectations of global economic stimulus have fueled the change in investor mood. On Monday, US Treasury Secretary Steven Mnuchin struck a positive tone, stating that the US and China have a “conceptual” agreement on enforcement concerns and that progress has been made. High-level trade talks are set to take place in early October in Washington.

Looking at the USD/JPY daily chart we can see that price has retraced to the 38% Fibonacci level. Major resistance lies above at the 200 period moving average.

Author

Dan Blystone

TradersLog.com

Experience Dan Blystone began his career in the trading industry in 1998. He worked as an arb clerk on the floor of the Chicago Mercantile Exchange (CME), flashing orders into the currency futures pits.

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