Japanese Yen Holds On To Modest Gains Against USD
The Japanese Yen (JPY) remained firmer against its American rival through the Asian session on Thursday amid renewed safe-haven demand. US Treasury Secretary Scott Bessent tempered market expectations for a quick resolution to the US-China trade standoff, which capped market optimism and underpinned the JPY. Additionally, hopes that Japan will reach a trade deal with the US and bets for further interest rate hikes by the Bank of Japan (BOJ) turned out to be other factors driving flows towards the JPY.
Meanwhile, hawkish BOJ expectations marked a major divergence when compared to prospects of more aggressive policy easing by the Federal Reserve (Fed). This further benefitted the lower-yielding JPY and kept a lid on the US Dollar (USD) recovery from multi-year lows, which, in turn, was seen exerting some downward pressure on the USD/JPY pair. The fundamental backdrop seems tilted towards the JPY bulls as traders now eye the US economic data and trade developments for some near-term impetus later during the early North-American session.
Source: FXStreet