Japanese Yen ends Wednesday firmer due to US Dollar pullback
The Japanese Yen ended Wednesday’s session on a firmer note, driven by a broad US Dollar pullback. This pullback was fueled by easing Middle East tensions, softer Treasury yields, and a risk-on bid.
The Yen’s strength was not a result of any action taken by the Bank of Japan, but rather a passenger on the US Dollar’s decline. The rate gap that has driven the pair higher all year remains wide open, and the BoJ has shown no urgency to close it.
Wednesday night’s trade figures did little to help the domestic economy, with the balance swinging back into deficit and machinery orders sliding. This suggests that the economy is hardly demanding tighter policy from the BoJ.
The pair is holding above its 50-day and 200-day exponential moving averages, near 158.00 and 155.50 respectively, pointing to a path of least resistance still up toward the 160.00 handle.