The Japanese yen, known as the ultimate safe haven currency, continues attracting flows. USD/JPY is currently trading at 100.27, below the support line 100.70. And more importantly, it is edging nearer to the very round number of 100.
Update: USD/JPY loses a digit – slips under 100
We have already been there in the not-so-distant past: post-Brexit, the pair fell to 99, but this did not last too long. As we finally get some hard data about the UK economy, could we see dollar/yen pushing lower?
The flow of funds to Japan is not really accompanied by other safe haven flows: oil prices continue moving higher, with prices rising above $45. Commodity currencies are looking healthy in their ranges.
So are we seeing USD selling more than anything else? The weak retail sales report in the US hurt the greenback for some time but the close on Friday eventually turned into a flow into safe haven assets and the yen tops all of them.So, it seems that dollar/yen is pushed down by dollar sell-offs and also by safe-haven flows only.
Yesterday’s Japanese GDP numbers were quite disappointing: the economy did not really grow, contrary to expectations, and inflation also remained low. The strong yen is partially to blame and the Japnese press is highlighting this.
The recent downfall was initially fuelled by the shortfalls of the government and the BOJ in comparison to the high expectations for stimulus from both institutions.
More: USD/JPY to 87 by year-end – Barclays
Here is how it looks on the daily chart. The pair is at the lowest in a month.
