After falling to a three-month low of 137.65 last week, the USD/JPY currency pair went above the psychological level of 142.00 for the first time.
On Wednesday, the USD/JPY pair moves away from its lowest point since August 29 (137.65). Spot prices fell back to the middle of the 139.00s during the first half of the European session as intraday gains stalled near the 140.30 region ceiling.
As tensions between Russia and the West ease, the US Dollar’s overnight recovery from a three-month low is losing steam. From what we know so far, it looks like Ukraine fired the missile that hit Poland on Tuesday at a rocket that was coming from Russia. This and new predictions that the Fed will raise rates less often keep hurting the dollar.
A small rise in the yields on US Treasury bonds could stop the dollar from falling. Stability in the financial markets usually makes the Japanese Yen weaker and the USD/JPY pair stronger, at least for now. The lack of follow-through buying makes bullish traders think twice before getting ready for a big recovery.
So Japan’s Finance Ministry has to hope that the dollar will get weaker to stop the USD/rise. JPY’s Since the Dollar may have reached its highest point, the MoF might not take any more steps for now.
TRADE IDEA
If the US dollar doesn’t drop below 140.30 in the next few days, it might go over 142.50.