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USD/JPY hits fresh monthly highs as widening US/Japan rate differential weighs on the yenNEWS |
1/28/2021 6:08:50 PM GMT | By Joel Frank
USD/JPY squeezed out fresh monthly highs at 104.462 in earlier trade.
US yields have risen, driving an increase in US/Japanese rate differential which has supported USD/JPY.
USD/JPY squeezed out fresh monthly highs at 104.462 in earlier trade, the pair having traded on the front foot for most of the session. A pick up in risk appetite is driving weakness in both USD and JPY versus most of their major G10 counterparts, on account of their status as safe-haven currencies. However, nominal US yields have seen a decent rise on Thursday (US 10-year yields are up more than 4bps to nearly 1.06%), driving an increase in US/Japanese rate differentials that tends to favour flows from JPY into USD, hence supporting the pair. That would explain why JPY has underperformed USD on Thursday, anyway. A slightly be