- The dollar loses strength due to a rebound in the markets.
- The yen falls but modestly, remains at recent levels.
- The focus remains on the Ukraine/Russia border.
The USD/JPY fell to 114.94 on Wednesday marking a low for the day after remaining sideways throughout the day around 115.10. The dollar still remains in the 115.00 area, with downside risks dominating for now.
The decline in USD/JPY occurred in the face of a general decline in the dollar in the market, prior to the opening of Wall Street. Despite rising against the dollar, the yen shows most losses in the market as a result of the rise in stock markets throughout the world.
Equity markets are recovering after several days of falls. The focus and uncertainty remain on the conflict on the border between Russia and Ukraine. Despite the better mood in the markets, caution persists. With no US data for Wednesday, statements on geopolitical issues may remain key. The presentation of Mary Daly, president of the San Francisco Federal Reserve, stands out.
Treasury bond yields rise modestly on Wednesday. The 10-year tranche yields 1.97% and the 30-year 2.26%. This advance helps limit overall dollar weakness and USD/JPY declines.
Should it clearly assert itself below 115.00, USD/JPY could go looking for the next support at 114.80. Tuesday’s low around 114.50 will then follow. To the upside, immediate resistance looms at 115.15 (daily high) followed by 115.25; therefore if there is a consolidation above 115.25, the dollar would be strengthened, pointing to more rises.
Technical levels
Source: Fx Street
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