Fxequity

New 12 months, Identical Pattern as USDJPY Breaks 2021 Peak


Japanese Yen Value Evaluation and Information

  • A New 12 months However Identical Developments
  • USDJPY Breaches 2021 Peak as Bonds Promote-Off

A brand new 12 months, nonetheless, some traits seen behind final 12 months stay. Fairness markets have been off to a flyer with contemporary file highs within the US, wherein the tech big, Apple, grew to become the primary firm to succeed in the $3tln market cap milestone.

Throughout the FX area, Japanese Yen promoting confirmed little indicators of abating, having come off the again from its worst efficiency towards the USD since 2014. USD/JPY is now at its highest stage since January 2017 after tripping stops by 115.50 in a single day amid the surge larger in US yields (US 10yr rose 11bps in yesterday’s session). That stated, whereas larger yields and equities have weighed on JPY, the view of market individuals favouring these currencies the place central banks want to elevate charges over low yielders are additionally at work with cross-yen notably firmer.

Japanese Yen Efficiency vs US Dollar

Japanese Yen Analysis: New Year, Same Trend as USDJPY Breaks 2021 Peak

Supply: Refinitiv

Looking at USD/JPY on the tech entrance, the each day RSI is again in overbought territory. Though, given the prevalence of this over the previous 12 months, this could unlikely be ample sufficient to point a possible pullback within the pair (91.5 percentile over 1yr lookback).

USD/JPY Overbought, However Far From the Extremes

Japanese Yen Analysis: New Year, Same Trend as USDJPY Breaks 2021 Peak

Supply: Refinitiv

As such, regardless of the bearish RSI divergence, the RSI is way from excessive circumstances, whereas I would wish to see US yields soften to be able to enhance my conviction in anticipating a dip in USD/JPY and as a substitute would pay nearer consideration to the weekly RSI. A reminder that USD/JPY is among the many closest correlated FX pairs to US yields and due to this fact it pays to maintain an in depth eye on US mounted earnings.

USD/JPY vs US 10YR Yield 60 Day Correlation

Japanese Yen Analysis: New Year, Same Trend as USDJPY Breaks 2021 Peak

Supply: Refinitiv, DailyFX





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