Japanese Yen draws support from reviving safe-haven demand amid trade concerns
The Japanese Yen (JPY) is building on the previous day's goodish recovery from over a two-week low and scaling higher for the second consecutive day against a broadly retreating US Dollar (USD).
Investors remain on edge amid persistent uncertainties surrounding US President Donald Trump's trade policies, which, in turn, benefit the safe-haven JPY.
The USD, on the other hand, is undermined by prospects for more interest rate cuts by the Federal Reserve (Fed) this year, bolstered by FOMC Minutes on Wednesday. This, in turn, contributes to the USD/JPY pair's intraday slide back below the 146.00 round figure during the Asian session.
Meanwhile, investors now seem convinced that rising trade tensions would add to woes for Japan’s economy and force the Bank of Japan (BoJ) to forgo raising interest rates this year.
The expectations were reaffirmed by Japan's Producer Price Index (PPI) released earlier this Thursday, which hinted that inflation pressures might be cooling off.
This, along with domestic political uncertainty, might hold back the JPY bulls from placing aggressive bets and help limit further losses for the USD/JPY pair. Traders now look to the US Weekly Initial Jobless Claims, which, along with speeches by influential FOMC members, would drive the Greenback.
Source: FXStreet
