The yen remains the top-performing currency this month, but it has given back some its gains over this week and some of this is related to a general bounce-back in the dollar, but some is more yen-specific, according to Bilal Hafeez, Research Analyst at Nomura.

Key Quotes

“Looking at how USD/JPY has traded during different trading sessions over the course of the day, we find that the Tokyo trading session appears to be seeing the largest moves in the yen. Last week it was yen strength and this week it has been for yen weakness. This suggests that Japanese investors have been grappling with USD/JPY breaking out from its 108-114 range of the past year that occurred last week. Typical dip-buyers such as lifers and retail may have been reluctant to buy last week, but have returned this week. Extrapolating these dynamics out several weeks is difficult, especially as we come close to fiscal year-end. Nevertheless, monitoring USD/JPY’s price action during the Tokyo session could provide an important clue for its path over the very short run.”

“More generally, the challenge in trading the yen is that its correlation with risk markets, such as equities, is changing. This year the yen has sometimes behaved as a “risk-on” currency and sometimes a “risk-off” currency. This could partly be related to the broader tech cycle that is Japan-supportive, but it is also suggestive of a transition in market regime that is unfolding. The one trend we think is associated with whatever regime emerges is a weak dollar against the yen thanks to the US’s twin deficits, a “stagflationary” tilt in macro data and valuations.”

Share: Feed news

Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.

If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.

FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.

The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.

Recommended content


Recommended content

Editors’ Picks

AUD/USD struggles near multi-month low below 0.6400, US CPI eyed

AUD/USD struggles near multi-month low below 0.6400, US CPI eyed

AUD/USD enters a bearish consolidation phase near a multi-month low of 0.6365 set on Tuesday. China's economic woes and less hawkish RBA remain a drag on the pair. Traders await the US CPI report on Wednesday before placing fresh directional bets. 

AUD/USD News
USD/JPY drops from 152.00 after Japanese PPI data

USD/JPY drops from 152.00 after Japanese PPI data

USD/JPY eases from 152.00 in Wednesday's Asian trading, stalling a two-day uptrend. A hot Japan PPI report leaves the door open for a BoJ rate hike next week, supporting the Japanese Yen while the US Dollar upswing takes a breather ahead of the US CPI data release.  

USD/JPY News
Gold price holds firm at around $2,700 ahead of US CPI report

Gold price holds firm at around $2,700 ahead of US CPI report

Gold price sticks to its positive bias for the third straight session and advances to over a two-week high near $2,700 early Wednesday. Geopolitical tensions and the resumption of buying by China’s central bank for the first time in seven months act as a tailwind for the XAU/USD. 

Gold News
Ripple's XRP breaks out of downtrend as RLUSD receives greenlight from New York regulators

Ripple's XRP breaks out of downtrend as RLUSD receives greenlight from New York regulators

Ripple's CEO Brad Garlinghouse announced on Tuesday that the company received a green light from the New York Department of Financial Services on the launch of its stablecoin RLUSD.

Read more
How the US-China trade dispute is redefining global trade

How the US-China trade dispute is redefining global trade

Since Donald Trump took office in 2017, trade flows and market shares have changed substantially. We think that shift is set to continue under looming tariffs and a new protectionist environment.

Read more
Best Forex Brokers with Low Spreads

Best Forex Brokers with Low Spreads

VERIFIED Low spreads are crucial for reducing trading costs. Explore top Forex brokers offering competitive spreads and high leverage. Compare options for EUR/USD, GBP/USD, USD/JPY, and Gold.

Read More

Forex MAJORS

Cryptocurrencies

Signatures