- Tuesday morning saw traders aggressively pushing the USDJPY pair higher as they chased a new 34-year high. The pair was last seen in public at that level in 1990, when the exchange rate peaked at ¥160, only 20 pip below the most recent high of ¥160.20. The dollar lost some of its gains as the day went on and was trading close to ¥159.50.
- On the one hand, the Japanese yen’s value is being driven by the general strength of the US dollar. When tech companies are experiencing a dip, speculators who want safety and a place to stash their money have been gravitating toward the US dollar. However, the Bank of Japan remains unyielding in its stance on interest rates, meaning that the people of Japan are exerting pressure on the country’s currency.
- Furthermore, the Ministry of Finance in Japan, which is in charge of keeping the yen strong, keeps silent about any action. In an attempt to stabilize the yen and eliminate the excessive speculation that has been driving it down this year, Japan may enter the market without warning if things continue to heat up from here. Since early January, the value of the yen relative to the dollar has decreased by almost 14%.
Source:
tradingview
