It’s turning into a dreadful day for the yen as it loses heavy ground right across the board.
USD/JPY is finally beginning to benefit from the rebound in the risk trade as it climbs alongside Treasury yields. There are offers at 108.25 and 108.50 with the pair up more than a cent since early European trading.
One of the stories that’s hurting the yen is the Wall Street Journal report saying the Bank of Japan sees greater risk of inflation falling below 1%. There was also some talk yesterday that Kuroda could launch a Draghi-style ‘whatever it takes’ attack on disinflation at the end of the month.
I wrote about the potential for USD/JPY gains yesterday as this wedge broke and I think it could continue to 109.00 after some consolidation/retracement.
USDJPY 30 minute chart