The Japanese Yen (JPY) remains stable against the US dollar (USD) and is consolidated in a tight range just above its recent minimum, report the head strategists of FX of Scotiabank, Shaun Osborne and Eric Theoret.
Higher yields offer limited support
“Japanese government bonds (JGBS) are being negotiated defensively and long -term yields are reaching new maximums of several decades before the elections to the upper house of this weekend. Market participants seem to be concerned about the fiscal implications of the vote, given the debate on cuts in the consumption tax to appease an electorate tired of inflation.”
“Higher yields of the JGBS would typically provide support to the JPY through the reduction of differentials, however, the feeling seems to be dominating and the options market reveals continuous erosion in the premium for protection against the strength of the JPY.”
“For the USD/JPY, we continue to highlight the importance of the two -month lateral range between the 142.50 support and the resistance of 148.00. A break would change the approach to the 200 -day MA (149.71).”
Source: Fx Street
I am Joshua Winder, a senior-level journalist and editor at World Stock Market. I specialize in covering news related to the stock market and economic trends. With more than 8 years of experience in this field, I have become an expert in financial reporting.
