Japanese Yen Weakens to 1998 Low as Nasdaq 100 Rallies, Eyes on Asia-Pacific Trade

Japanese Yen, USD/JPY, Wall Street, Nasdaq 100 – Asia Pacific Market Open

  • USD/JPY sores to best possible since 1998 as Nasdaq 100 rallies
  • yen weak point persevered after BoJ maintained dovish coverage
  • Will Nikkei 225, ASX 200Hang Sang rally on Wednesday?

Tuesday’s Market Recap – Market Rally Across the Globe Further Sinks the Yen

The anti-risk Japanese Yen used to be beaten on Tuesday as marketplace self belief struck international inventory exchanges – see chart under. On Wall Streetfutures monitoring the Nasdaq 100, S&P 500 and Dow Jones rallied 2.48%, 2.5% and a couple of.2% respectively. During European hours, the Euro Stoxx 50 and FTSE 100 climbed 0.7% and nil.42% respectively. This is as Japan’s Nikkei 225 won 1.84% whilst Australia’s ASX 200 rose 1.41%.

Are markets beginning to worth within the subsequent easing cycle from the Federal Reserve? This does no longer appear so. Treasury yields had been most commonly little modified over the last 24 hours. US headline CPI expectancies (YoY) for 2023 slightly nudged from the tip of remaining week. You too can take a look at the 1-year breakeven price to gauge inflation estimates, and the ones had been additionally little modified from Friday.

With that during thoughts, it sort of feels there may were a show of exhaustion to start out off the holiday-shortened week for Wall Street. We also are coming near the tip of the second one quarter, opening the door for rebalancing activity,

This spelled unhealthy information for the Yen, which has a tendency to underperform when general marketplace sentiment is rosy. As a end result, threat urge for food helped propel USD/JPY to its best possible since 1998! Last week, the Bank of Japan defended its ultra-loose policy Despite headline inflation now somewhat above goal. While it presented some verbal jabs towards the unexpectedly weakening forex, it bodily did little to protect it, leaving it at risk of what came about in markets on Tuesday.

Japanese Yen Slumps as Stocks Rally on Tuesday

Japanese Yen Weakens to 1998 Low as Nasdaq 100 Rallies, Eyes on Asia-Pacific Trade

Chart Created in TradingView

Wednesday’s Asia Pacific Trading Session – Focus on Risk Appetite

Wednesday’s Asia-Pacific financial docket is somewhat gentle, putting the focal point for buyers on general threat urge for food. The quite rosy consultation on Wall Street may just imply some follow-through for regional exchanges, in all probability opening the door for Hong Kong’s Hang Seng Index to rally along the Nikkei 225 and ASX 200. This would possibly proceed leaving the Japanese Yen in danger. However, it stays difficult to be fundamentally bullish equities for the time being,

USD/JPY Technical Analysis

USD/JPY shot upper above the 135.16 – 135.57 resistance zone, which used to be made up of the 2002 top. This has driven to ranges remaining observed in 1998, exposing the 78.6% Fibonacci extension at 139.68. Confirmation of the breakout is missing for now as unfavourable RSI divergence persists. The latter is an indication of fading upside momentum, which will precede a flip decrease. In such an example, stay a detailed eye at the emerging trendline from March which might reinstate an upside center of attention.

USD/JPY Daily Chart

Japanese Yen Weakens to 1998 Low as Nasdaq 100 Rallies, Eyes on Asia-Pacific Trade

Chart Created in TradingView

— Written through Daniel Dubrovsky, Strategist for DailyFX.com

To touch Daniel, use the feedback segment under or @ddubrovskyFX on Twitter

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