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.”
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