USD/JPY climbs to fresh daily high, around mid-131.00s amid receding safe-haven demand – by hareshmenghani USDJPY RiskAppetite Bonds Fed Currencies
USD/JPY gains strong positive traction on Monday and draws support from a combination of factors.
The risk-on impulse, the widening of the US-Japan rate differential weighs on the JPY and lends support.Thebuilds on Friday's goodish recovery from the 129.65 area, or its lowest level since February 03 and gains some follow-through traction on the first day of a new week. The positive momentum remains uninterrupted through the first half of the European session and lifts spot prices to a fresh daily high, around the mid-131.00s in the last hour.
A generally positive tone around the equity markets undermines the safe-haven Japanese Yen , which, in turn, is seen as a key factor acting as a tailwind for the USD/JPY pair. News that First Citizens Bank & Trust Company will buy all of Silicon Valley Bank's deposits and loans from the Federal Deposit Insurance Corporation calm market nerves about the contagion risk.
The risk-on flow, along with easing fears of a full-blown banking crisis, lead to a further rally in the US Treasury bond yields. This results in the widening of the US-Japan rate differential, which is seen as another factor weighing on the JPY and providing an additional boost to the USD/JPY pair.
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