By: DailyForex.com
The US Dollar, which had earlier moved within striking distance of the recently struck 1-week peak versus the Japanese Yen, is now struggling for traction. Earlier, the greenback had been lifted by rising yields in US Treasury instruments. Despite the Trump administration’s assurances to the contrary, investors appear concerned that the newly approved tax reform bill will result in significantly higher deficit for the US, thus pushing higher yields on 10-year bonds. Beyond higher US debt, analysts say that could lead to increased bond issuance, as well as more aggressive interest rate increases from the Federal Reserve.
As reported at 10:23 am (JST) in Tokyo, the USD/JPY was trading nearly flat at 113.346 Yen, down 0.01%; the pair has ranged from a low of 113.187 Yen to 113.413 Yen. The EUR/JPY is lower at 134.6111 Yen, down 0.0493%; the pair earlier hit a high of 134.6550 Yen while the low is at 134.4240 Yen. The AUD/JPY is also lower at 86.8977 Yen, down 0.0307%.
BOJ’s Kuroda Eyed
In Asian trade, FX traders are waiting for the Bank of Japan news conference to be presided over by Haruhiko Kuroda, the BOJ Governor. Many are anxious to see if the BOJ will finally join its counterparts by tapering its Quantitative Easing stimulus plan. Last month, Kuroda specifically mentioned a “reversal rate,” which is a level whereby there are more harmful impacts to an economy than there are benefits. One trader in Singapore said that should Kuroda’s comments by viewed as hawkish, then the US Dollar could come under some pressure versus the Japanese Yen, while a bounce could occur if Kuroda keeps a dovish stance.