The USD/JPY currency pair rallied higher today as the Nikkei was closed due to a national holiday amid increased selling pressure on the Japanese yen. The Japanese yen was much weaker than the US dollar given the higher risk sentiment in the markets, which has led to investors selling the yen, while buying the greenback.
The currency pair gained over 50 points at the height of its rally given the stronger US dollar, as tracked by the US Dollar Index, which traded above 99.00 for much of the day.
The currency pair rallied higher today given that the Japan Exchange Group, which controls the Tokyo Stock Exchange and the Osaka Exchange, was honoring a national holiday. The two exchanges will remain closed from May 3 to May 5 as the Japanese celebrate Constitution Memorial Day, Greenery Day and Children’s day. The markets increased risk appetite and the strong US data largely contributed to the currency pair’s rally.
The currency pair was significantly affected by the positive data released from the US docket as the ISM Non-Manufacturing composite index came in at 57.5 versus the expected 55.8 and the previous 55.2. The ADP employment change report for April also came in higher at 177,000 versus the expected 175,000, but much lower than the previous 255,000.
The currency pair’s future performance this week is likely to be affected by US economic data such as the initial jobless claims and factory orders, both scheduled for release tomorrow.
The USD/JPY was trading at 112.54 as at 18:21 GMT having rallied much higher after the FOMC rate decision. The EUR/JPY was trading at 112.71 having opened the day’s session trading at 122.43.
If you have any questions, comments or opinions regarding the Japanese Yen,
feel free to post them using the commentary form below.
