Japanese Yen set to give up despite intervention concerns
The Japanese Yen (JPY) recovered most of its losses against the Greenback, dragging the USD/JPY pair to mid-154.00s heading into the European session on Monday
Speculations that Japanese authorities might intervene in the forex market to prop up the domestic currency, coupled with risks of further escalation of geopolitical tensions, turned out to be key factors offering some support to the safe-haven JPY.
Additionally, a modest US Dollar (USD) weakness contributed to capping the pair’s upside.
However, any meaningful appreciating move for the JPY seems limited amid uncertainty over the timing of the Bank of Japan (BOJ) interest rate hike. Further, expectations that US President-elect Donald Trump’s policies will be inflationary and limit the scope for further interest rate cuts by the Federal Reserve (Fed) continue to support a pickup in the US Treasury bond yields. This supports prospects for some buying on a weaker USD and should keep a lid on the low-yielding JPY, which in turn, benefits USD/JPY bulls.
Source: FXStreet