Japanese Yen Slumps To Three-Week Low Against USD; Lack Of Follow-Through Selling
The Japanese Yen (JPY) weakened against its US counterpart for the fourth straight day, pushing the USD/JPY pair to the 151.00 range, or a three-week high during the Asian session on Tuesday (3/25). Global risk sentiment remained supported by hopes that US President Donald Trump’s so-called tit-for-tat tariffs would be narrower and less stringent than previously feared. Additionally, optimism over a possible Russia-Ukraine peace deal and reports that China is considering including services in a subsidy program to stimulate consumption further boosted investor confidence, weakening the safe-haven JPY.
Meanwhile, the minutes of the Bank of Japan’s (BOJ) January meeting showed that policymakers discussed under what conditions the central bank should raise interest rates further. However, the minutes did not provide any hints on the likely timing of the BOJ’s next move and did little to impress JPY investors. However, the BOJ’s aggressive outlook still marks a big divergence from the Federal Reserve’s (Fed) forecast for two 25 basis point rate cuts by the end of this year. This may hold USD investors back from placing aggressive bets in favor of the lower-yielding JPY, which should cap upside for the USD/JPY pair. (Newsmaker23)
Source: FXstreet
