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Forex pairs in this Article » USD/JPY (London) - USD/JPY edged its way higher overnight on Japanese data.

Japanese appetite for foreign-denominated bonds continues

Japan recorded a record trade deficit in November, with a shortfall of JPY592.8 billion.

In addition, data from the Japanese Ministry of Finance showing huge outflows from Japanese investors – primarily into euro and dollar-denominated bonds. Data showed that investors bought up JPY1.48 trillion in November.

Fed tapering schedule in focus

The pair had traded in strong bullish territory, with momentum continuing from the Federal Reserve’s decision in December to trim its monthly asset purchases by USD10 trillion, bringing monthly purchases down to USD75bn. However, weaker than expected US non-farm payroll numbers on Friday left question marks over the anticipated pace of future QE tapering.

USD/JPY traded higher overnight with Japanese importers buying into the Tokyo fix. The pair hit a high of JPY103.5300 before selling off to resistance at JPY103.20. The pair is currently trading at JPY103.5300, but bearish momentum remains on monetary policy expectations between the Bank of Japan and the US Federal Reserve.
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