Forex Today: Japanese Yen Hits New 20-Year Low

The Japanese Yen continues to plummet to its lowest since 2002 as BoJ’s Koroda determined to “keep up powerful easing”.

  1. The Forex market is at the center of attention as the USD/JPY currency pair powers to a new 20-year high. The Japanese Yen is weak as the Bank of Japan has signaled its determination to persist with a unique policy of strong monetary easing as it attempt to drive Japanese inflation up to reach its target of 2%, while almost all other major central banks are tightening monetary policy to combat overly high inflation rates. The USD is stronger on rising yields, with the 5 and 10-year yields exceeding 3% for the first time since May. These factors are producing a very strong bullish breakout in the USD/JPY currency pair, with strong momentum likely to continue over the coming days. There is some fear that the Bank of Japan may soon intervene to try to halt the slide, however.
  2. Other currencies apart from the Yen, notably the Swiss Franc, are also falling against the US Dollar, which is clearly the strongest major currency.
  3. The Reserve Bank of Australia hiked its interest rate by 0.50% yesterday to 0.85%, surprising analysts who had mostly expected a hike of only 0.25%. This sent AUD yields sharply higher, but the Australian Dollar has given up its initial gains quite quickly, although it remains one of the firmer major currencies.
  4. Major cryptocurrencies are falling again, with Ethereum looking especially prone to a major technical bearish breakdown.
  5. Janet Yellen, the US Treasury Secretary, has said that the US faces “unacceptable levels of inflation”. This is seen as a significant remark from an official who has typically been seen as a monetary dove.
  6. Energy commodities, especially Crude Oil and Natural Gas, are rising.
  7. Global stock markets are mixed, with US markets choppy, but European and Asian markets mostly higher over the day.
  8. Daily new coronavirus cases globally fell last week, continuing a long-term trend.
  9. It is estimated that 65.7% of the world’s population has received at least one dose of a coronavirus vaccination, while approximately 6.8% of the global population is confirmed to have contracted the virus at some time, although the true number is highly likely to be much larger.
  10. Total confirmed new coronavirus cases worldwide stand at over 536.5 million with an average case fatality rate of 1.18%.
  11. The rate of new coronavirus infections appears to now be significantly increasing only in Chile and Vanuatu.

 

Adam Lemon

Adam Lemon began his role at DailyForex in 2013 when he was brought in as an in-house Chief Analyst. Adam trades Forex, stocks and other instruments in his own account. Adam believes that it is very possible for retail traders/investors to secure a positive return over time provided they limit their risks, follow trends, and persevere through short-term losing streaks – provided only reputable brokerages are used. He has previously worked within financial markets over a 12-year period, including 6 years with Merrill Lynch.

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