© Dukascopy Bank
Overall the yen has experienced rising tendency starting to gain already on Tuesday morning, as the risk-off sentiment from the previous day ended and demand for safe havens dropped. The failed Doha meeting, which was expected to end in a oil production freeze agreement, sent oil plummeting on Monday along with riskier currencies and stocks, sparking a flight to safety. However, the yen bounced back against the greenback on Thursday as the Japanese currency booked strong gains against commodity currencies on declining oil prices, launching cross selling on markets. The yen's strength is unnerving Japanese policymakers who are trying to fend off deflation and prop up the weakening Japanese economy. The central bank introduced negative rates in January to fuel economic growth and spur inflation.
After touching 112.32 on April 22, the pair which stronger than other major crosses reacts to the fundamental news from both sides, received a strong bullish bias, and over the last week, the USD/JPY pair advanced more than 200 pips. Traders believe the pair will continue moving to the north, as the consensus forecast stands for 109 level less than 120 pips below the current market price. At the same time, for the third straight week, around 80% of respondents are having bullish view on the pair.
© Dukascopy Bank