The USD/JPY pair traded near the multi-month high on Thursday, reaching 157.84 and aiming to break higher from the December high of 158.07. Market focus remained on US political uncertainty as former President Donald Trump prepared to retake office amidst ongoing geopolitical tensions in the Middle East. The Japanese yen suffered from speculation that the upcoming Trump presidency would result in higher inflation and interest rates in the US, contributing to expectations of higher Treasury yields and maintaining the strength of the Greenback.
Tepid Chinese data released also weighed on market sentiment at the start of the day, with the country’s December Caixin Manufacturing PMI lower than expected at 50.5. This added to the downward pressure on the Japanese yen. The technical outlook for the USD/JPY pair indicates a bullish continuation, with the possibility of further gains if the pair surpasses the December high and reaches levels around 161.95. Initial support lies at the intraday low and key SMA levels.
The Japanese Yen was the strongest against the British Pound compared to other major currencies. The percentage change of the Japanese Yen against a list of major currencies today highlights its relative strength against currencies such as the Euro, British Pound, Canadian Dollar, Australian Dollar, and others. The heat map provided further visual representation of the percentage changes of major currencies against each other, with the base currency shown on the left column and the quote currency displayed across the top row.
Overall, the USD/JPY pair continued to trade near multi-month highs, driven by expectations of higher US Treasury yields and ongoing political uncertainty in the US and the Middle East. Speculation surrounding the potential impact of the upcoming Trump presidency on inflation and interest rates further boosted the Greenback, leading to the Japanese yen’s weakening. The technical outlook suggests a bullish continuation for the USD/JPY pair, with potential resistance levels to watch for further gains. The Japanese Yen remains strong compared to other major currencies, particularly against the British Pound.
