Yen weakens in Asia Trade

However, while it pushed up against the yen, it has struggled to break out, despite the widening gap between US and Japanese monetary policy.

Stephen Innes, senior trader at OANDA, said in a note: “By all accounts with the Bank of Japan and Fed divergence still on the cards, (the dollar) should be trading higher.”

But he said that ongoing geopolitical fears following North Korea’s missile test last week and questions about Japanese Prime Minister Shinzo Abe’s future after recent scandals and an election setback “are weighing on Japanese investors as a drive for downside protection enters the psyche”.

He added: “It appears these fears are tempering USDJPY upside despite the Fed maintaining its tightening conviction, and BoJ (keeping) its easing bias.”

Via AFP

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Stephen Innes

Stephen Innes

Senior Currency Trader and Analyst at OANDA
Stephen has over 25 years of experience in the financial markets and specializes in Asian currencies at OANDA. After having started his trading career with NatWest Bank, he is currently based in Singapore as a Senior Currency Trader and Analyst with OANDA, focusing on the movement of the Aussie Dollar and ASEAN Currencies. Stephen has an extensive trading experience in Interest Rate Futures, Money Markets and Precious Metals. Prior to joining OANDA, he worked with organizations like Cambridge Mercantile, Nat West, Garvin Guy Butler, Sumitomo Mitsui Banking Corporation. Stephen was born in Glasgow, Scotland, and holds a Degree in Economics from the University of Western Ontario.
Stephen Innes