USD/JPY sticks to gains near one-week high, lacks follow-through beyond 132.00 mark – by hareshmenghani USDJPY RiskAppetite Fed Bonds Currencies
day. The momentum pushes spot prices to a one-week high, though bulls struggle to capitalize on the move further beyond the 132.00 round-figure mark.
Easing fears of a full-blown banking crisis remains supportive of a generally positive tone around the equity markets, which, in turn, undermines the safe-haven Japanese Yen and acts as a tailwind for the USD/JPY pair. The takeover of Silicon Valley Bank by First Citizens Bank & Trust Company calmed market nerves about the contagion risk.
The JPY is further weighed down by the overnight dovish-sounding remarks by Bank of Japan Governor Haruhiko Kuroda, saying that it is too early to debate an exit from easy monetary policy. Adding to this, the recent widening of the US-Japan rate differential, led by a rally in the US Treasury bond yields witnessed since the beginning of the current week, also contributes to driving flows away from the JPY.
Market participants now look to the US economic docket, featuring the release of Pending Home Sales later during the early North American session. Apart from this, the US bond yields will influence the USD price dynamics and provide some impetus to the pair. Traders will further take cues from the broader market risk sentiment to grab short-term opportunities. The focus, however, remains glued to the release of the Fed's preferred inflation gauge - the US Core PCE Price Index, due on Friday.
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