The Japanese Yen eased back against the U.S. Dollar, getting some relief from the previous day’s rally which followed a Wall Street sell off and yet another fall in yields for U.S. Treasuries. On Monday, the Yen had jumped with the unwinding of short positions which occurred after last Friday’s dismal jobs data from the U.S. spooked investors who had initially been confident of the Fed’s tapering plans. The Dollar has been under pressure as investors reconsider that any possible future rate hikes might not occur until late in 2015.
As reported at 10:40 a.m. (JST) in Tokyo, the USD/JPY pair was trading at 103.48 Yen, a gain of 0.5% after the 1.1% loss yesterday. GBP/JPY jumped 0.6% to trade at 169.64 Yen, after Monday’s loss of 1.7% while the EUR/JPY edged 0.3% higher, regaining some of Monday’s 0.9% decline.
FX Analysts Forewarn of More JPY Unwinding
Currency strategists believe that there is the potential for more Yen unwinding in the near future, given the proximity to the abundance of open short positions at the year’s end; one strategist foresees the USD/JPY pair trading between 102.00 and 104.50 Yen for the remainder of this week. BNP Paribas analysts said in a recent client note that they foresee a bearish JPY ahead with economic data acting as headwinds to the safe haven currency.