VOT Research Desk
On the opening day of a new week, the USD/JPY pair experiences some fresh selling pressure after Friday’s minor rebound.
Through the early European session, the pair holds it offered tone and is currently edging ever-closer to the daily bottom, in the 138.30-138.25 range.
The Japanese Yen is viewed under pressure from haven flows because to the deteriorating COVID-19 situation, which is regarded as placing downward pressure on the USD/JPY pair. In fact, on Saturday, China recorded a record-high number of daily infections, pushing the government to enact stringent anti-COVID regulations in a number of cities.
The zero-COVID policy has also sparked protests across China and raised worries about a further slowdown in economic activity due to popular unhappiness.
In turn, this increases demand for conventional investments and keeps investors on the edge. Despite a dovish reading of the minutes from the FOMC meeting in November, another rate increase of 50 basis points is still anticipated from the US central bank in December.
In contrast, the BoJ has not yet indicated a desire to raise interest rates.
Additionally, BoJ Governor Haruhiko Kuroda reaffirmed that the institution will continue its monetary easing in order to boost the economy and steadily hit its 2% inflation goal.
This calls for prudence before putting new bearish bets around the USD/JPY pair in the absence of any pertinent economic data.
|
Daily SMA20 |
142.87 |
|
Daily SMA50 |
144.76 |
|
Daily SMA100 |
141.17 |
|
Daily SMA200 |
133.96 |
