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USD/JPY drops to one-week low, eyeing 115.00 mark amid reviving safe-haven demand

  • USD/JPY turned decrease for the fourth successive day and dropped to a one-week low on Monday.
  • The prevalent cautious temper benefitted the safe-haven JPY and exerted some downward strain.
  • A robust pickup within the USD demand did little to impress bulls or stall the continuing corrective slide.

The USD/JPY pair dropped to a one-week low in the course of the mid-European session, with bears now eyeing a transfer to problem the important thing 115.00 psychological mark.

The pair struggled to capitalize on its intraday transfer up, as a substitute met with a contemporary provide close to the 115.85 area and turned decrease for the fourth successive day on Monday. The downfall dragged the USD/JPY pair additional away from a five-year excessive touched final week and was sponsored by reviving demand for the safe-haven Japanese yen.

The US Treasury bond yields extended their current sturdy transfer up amid rising acceptance for an eventual Fed lift-off in March 2022. The market bets had been reaffirmed by Friday’s launch of the US jobs report, which highlighted a good labour market and pushed the yield on the benchmark 10-year US authorities bond to a two-year excessive.

An prolonged sell-off within the US bond markets weighed on buyers’ sentiment, which was evident from a cautious temper across the fairness markets. This, in flip, compelled buyers to take refuge in conventional safe-haven currencies, together with the JPY, which was seen as a key issue that exerted some downward strain on the USD/JPY pair.

In the meantime, the downtick appeared relatively unaffected by a robust pickup within the US greenback demand, bolstered by elevated US bond yields. It, nevertheless, stays to be seen if the continuing corrective pullback marks the tip of a one-month-old up-trend or appeal to contemporary shopping for at decrease ranges amid absent related market-moving macro information from the US.

Market individuals now look ahead to Fed Chair Jerome Powell’s testimony on Tuesday. This will likely be adopted by the most recent US client inflation figures on Wednesday, which together with Friday’s launch of the US Retail Gross sales information will affect the USD value dynamics and supply some significant impetus to the USD/JPY pair.

Technical ranges to look at

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