USD/JPY holds tightly above 128.00 as BoJ anticipation rises – by anilpanchal7 USDJPY BOJ YieldCurve RiskAppetite Currencies
Mixed performance of bond markets, indecisive DXY despite downbeat catalysts put a floor under the prices.Any disappointment could offer notable rebound of the Yen pair amid oversold RSI conditions.portrays the typical pre-event anxiety as it seesaws near 128.20-30, picking up bids of late, as markets in Tokyo open for the key Wednesday. In doing so, the Yen pair justifies the traders’ cautious mood ahead of the Bank of Japan’s monetary policy decision.
That said, the Reuters Tankan index for Japan’s big manufacturers stood at -6 in January, down from +8 last month, to mark the first negative reading since January 2021. Additionally, Japan’s Machinery Orders for November slumped -8.3% MoM versus -0.9% forecast and 5.4% previous readings. USD/JPY dropped the previous day as the Japanese Government Bond yields infused strength into the JPY. That said, the 10-year JGB poked the highest levels since June 2014 the previous day while flashing 0.59% figure, just above the upper limit of the BoJ’s desired range. marked a dismal closing around 102.35, after an initially positive performance, which in turn weighed on the USD/JPY prices previous day.
Against this backdrop, Wall Street closed mixed and the benchmark 10-year US Treasury bond yields ended the day with nearly four basis points of an upside to 3.55% even as the two-year counterpart retreated to 4.20%. That said, the S&P 500 Future print mild losses while the US Treasury bond yields remain firmer at the latest.
Looking forward, USD/JPY pair’s fate relies on how well the BoJ policymakers defend their easy money policy amid hopes of witnessing hints of an exit, especially after the last meeting's surprise tweak into the Yields Curve Control policy. Should the BoJ disappoints and announces no change, the USD/JPY may portray the much-awaited recovery.
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