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16 Aug 2013
USD/JPY looks for a clearer trend, around 97.40
FXstreet.com (Edinburgh) -The USD/JPY is now consolidating its intraday losses below the 98.00 handle, prolonging the negative trend for the third consecutive session.
USD/JPY focus on US data, Fed’s taper
Rising yields overseas are accelerating the seek for higher returns from Japanese investors, against the backdrop of decreasing JGBs yields induced by the BoJ purchases. “Japanese investors are buying foreign bonds again, and with US 10 yields approaching a multi-year high overnight, we would not be surprised if this trend continues”, observed Geoffrey Yu and Gareth Berry, Strategists at UBS, while Currency Analyst Lee Hardman at BTMU suggested, “investor expectations have been reinforced that the Fed is likely to begin tapering QE in September which resulted in a sell off in both the US fixed income and equity markets alongside the US dollar. Beyond the near-term position adjustment, higher relative US yields should help to support a stronger US dollar“.
USD/JPY key levels
The pair is now losing 0.01% at 97.36 and a violation of 97.05 (low Aug,16) would open the door to 97.00 (low Aug.15) and finally 96.88 (low Aug.13). On the flip side, resistance levels align at 97.76 (high Aug.16) ahead of 98.00 (psychological level) and then 98.66 (high Aug.15).
USD/JPY focus on US data, Fed’s taper
Rising yields overseas are accelerating the seek for higher returns from Japanese investors, against the backdrop of decreasing JGBs yields induced by the BoJ purchases. “Japanese investors are buying foreign bonds again, and with US 10 yields approaching a multi-year high overnight, we would not be surprised if this trend continues”, observed Geoffrey Yu and Gareth Berry, Strategists at UBS, while Currency Analyst Lee Hardman at BTMU suggested, “investor expectations have been reinforced that the Fed is likely to begin tapering QE in September which resulted in a sell off in both the US fixed income and equity markets alongside the US dollar. Beyond the near-term position adjustment, higher relative US yields should help to support a stronger US dollar“.
USD/JPY key levels
The pair is now losing 0.01% at 97.36 and a violation of 97.05 (low Aug,16) would open the door to 97.00 (low Aug.15) and finally 96.88 (low Aug.13). On the flip side, resistance levels align at 97.76 (high Aug.16) ahead of 98.00 (psychological level) and then 98.66 (high Aug.15).