The Japanese yen today traded in a tight range against the US dollar despite the greenback’s overall weakness against other major currencies. The USD/JPY traded sideways even as the Nikkei 225 equity index closed lower for the day despite the risk-on market sentiment.
The USD/JPY currency pair today traded between a high of 109.55 and a low of 109.43 and was trading within this range at the time of writing.
The currency pair’s overall weakness was driven mainly by the risk-on market sentiment, which saw investors dump safe-haven assets such as the yen and the US dollar. The fact that Japan’s Nikkei closed 0.36% lower at 23,837.72 also did not help the yen, which was already under pressure. Japanese Prime Minister Shinzo Abe tried to placate investors saying that the country’s economy was witnessing a modest recovery. It also emerged that the Bank of Japan had rejected a proposal by the International Monetary Fund to create a target inflation range instead of its current fixed 2% target. Japan already had the longest-running quantitative easing program in the world. The release of weak Japanese retail sales and industrial production data for November also did not help the pair.
The fact that the greenback was also quite weak as tracked by the US Dollar Index did not help the yen, which is also a safe-haven currency. The pair could not replicate yesterday’s bounce, which saw it stuck trading sideways.
The currency pair’s future performance is likely to be influenced by geopolitical events given the upcoming weekend.
The USD/JPY currency pair was trading at 109.51 as at 14:31 GMT having risen from a low of 109.43. The CAD/JPY currency pair was trading at 83.73, having rallied from a low of 83.45.
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