The risk on trade has flourished Friday in the currency markets as the appetite has been expressed with the yen tumbling as its haven premium is unwound. The USD/JPY has rallied into eight-day high territory, above 120.80, which is a gain of nearly 1.4% from Thursday’s low. Other yen crosses are also up. The moves come with European stock markets rallying strongly today. The dollar index is at five-week highs on Yellen’s signal that a rate hike is still a possibility before year end.
Japanese inflation data revealed the expected dip back into deflation territory, with core CPI falling to -0.1% y/y, which is the first negative print in two-and-a-half years. Stock markets in Asia have been mixed, and most Asian and commodity currencies have been steady.
The USD/JPY currency pair pushed above trend line resistance near 120.40, and is poised to test the range highs at 121.20. Support on the currency pair is seen near the 10-day moving average at 120.33. Momentum is positive with the MACD printing in positive territory with an upward sloping trajectory.
Source:: Risk on Trade See the Yen Tumble