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Forex pairs in this Article » USD/JPY (Athens) – The USD/JPY is trading under light pressure on early European trading session, due to the Nikkei decline but mostly to ‘risk-off’ sentiment that flooded the board from the kick off of the Asian trading session.

USD/JPY near the vicinity of its 200-day MA (97.41); cross tumbles on Nikkei decline, FOMC

The USD/JPY has been trading constantly downwards since the early start of the Wellington trading session, as RBA’s Stevens made its best efforts to disseminate risk off mood across the board, therefore driving the Japanese Yen higher on the back of safe-haven demand. Apart from Stevens who considered that the Aussie is overvalued, spurring risk aversion, traders are also reluctant to take to open new positions ahead of the FOMC statement on Wednesday. Last but not least, the overall risk off mode can also well be attributed to the remerging Chinese jitters, as after China’s first cash injection in two weeks, there was an immense failure to reduce money market rates. Elaborating on, the PBOC injected CNY13 billion into the markets after two weeks ‘break’ in liquidity provision, but still the benchmark 7-day SHIBOR rate went the upper level to a new month high of 4.497%.

Technical Aspects on the USD/JPY

Emmanuel Ng of OCBC Bank mentions that “the USD/JPY may remain buffeted by potential near term USD resilience and risks of volatility from the risk appetite front. In the interim, the USD/JPY may continue to straddle its 200-day MA (97.44) amid our still heavy bias.”
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