The yen is in demand as a safe haven asset
2022.11.29 11:59
The yen is in demand as a safe haven asset
Budrigannews.com – For the second day in a row, the yen is in positive territory.It is trading at 138.60 in the North American session, down 0.23 percent. Earlier in the day, the yen attempted to consolidate below the 138 level.
Investors have been alarmed by the widespread demonstrations in China over the country’s zero-COVID policy, which is anticipated to worsen supply chain disruptions and reduce domestic spending.
The protests have been suppressed by the Chinese government, which will not ease its covid policy until the number of cases significantly decreases.The protests have made people less willing to take risks, and the Japanese yen, a traditional safe haven, has gained only a little.
With the Fed meeting two weeks away, the Federal Reserve continues to send a hawkish message to the markets. On Monday, member of the Fed James Bullard stated that the markets underestimate the Fed and that the terminal rate could be anywhere from 5% to 7%.
The terminal rate has been valued at approximately 5%, so the markets are not buying into that prediction.The markets aren’t entirely persuaded by the Fed’s hints that it will raise rates by 50 basis points at its meeting in December.
There is now a 33% chance of a 75-bp move and a 67% chance of a 50-bp move. The ratio was 80-20 in favor of a 50-bp increase just two weeks ago. The markets are looking for information about the plans of the Fed, and Jerome Powell, who is expected to talk about inflation in a speech on Wednesday, will be closely watched.
In October, retail sales in Japan slowed to 4.3%, down from a revised 4.8%.This was lower than the consensus estimate of 5%, but retail sales have increased since March, when Japan eased border restrictions as the number of Covid cases decreased.
USD/JPY technical analysis
- There is resistance at 139.82 and 141.58
- USD/JPY is testing support at 138.62. Below, there is support at 137.39
This article only contains general information.It does not offer securities-buying or-selling recommendations or investment advice. The authors are the opinions; not always OANDA Corporation’s or any of its subsidiaries, officers, or directors’. Leveraged trading is risky and not for everyone. You might lose everything you put in.
