Japanese Yen Strengthens Against USD to Start Week
The Japanese Yen (JPY) strengthened against its American counterpart at the start of a new week, taking the USD/JPY pair back below the 154.00 level during the Asian session on Monday (11/25). The US Treasury bond yields fell sharply in reaction to the nomination of Scott Bessent as the US Treasury Secretary. This, in turn, prompted traders to scale back their bullish bets on the US Dollar (USD) after its recent rally to two-year highs and drove some flows towards the lower-yielding JPY.
That said, uncertainty surrounding the Bank of Japan’s (BOJ) interest rate hike plans, coupled with the prevailing risk-on environment, could cap any meaningful appreciation move for the safe-haven JPY. Additionally, expectations that US President-elect Donald Trump’s policies could reignite inflation and constrain the Federal Reserve’s (Fed) slow rate cuts could act as a tailwind for the US Treasury bond yields. This, in turn, should benefit USD investors and lend some support to the USD/JPY pair.
Source: FXstreet