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

Head of Trading APAC at OANDA
Stephen has over 25 years of experience in the financial markets and currently based in Singapore as the Head of Trading Asia Pacific with OANDA. Stephen's market views focus on the movement of G-10 and ASEAN Currencies. His views appear in Bloomberg, CNBC.Reuters, New York Times WSJ and the Economist. His media appearances include Bloomberg TV & Radio, BBC International, Sky TV, Channel News Asia, ASTRO AWANI and BFM Malaysia. Stephen has an extensive trading experience in Spot and Forward FX, Currency and Interest Rate Futures, Money Market Derivatives and Precious Metals. Before joining OANDA, he worked with organisations like Nat West, Chemical Bank, Garvin Guy Butler, and Sumitomo Mitsui Banking Corporation. Stephen was born in Glasgow, Scotland, and holds a Degree in Economics from the University of Western Ontario.
Stephen Innes