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Japanese Yen Hits New 20-Year Low For 4th Day

The Japanese Yen continued to weaken to new 20-year lows yesterday, but is showing signs of exhausted momentum.

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The yen is a popular asset during turbulent times.

  • The Forex market is at the center of attention as the USD/JPY currency pair again powered to a new 20-year high yesterday. The Japanese Yen is weak as the Bank of Japan has signaled its determination to persist with a unique policy of strong monetary easing as it attempt to drive Japanese inflation up to reach its target of 2%, while almost all other major central banks are tightening monetary policy to combat overly high inflation rates. The USD is stronger on rising yields. These factors are producing a very strong bullish breakout in the USD/JPY currency pair, although there are signs that the momentum has begun to tail off.
  • Other currencies apart from the Yen, notably the Swiss Franc, are also falling against the US Dollar, which remains the strongest major currency albeit with declining momentum. The Turkish Lira has been falling strongly over recent days.
  • WTI Crude Oil continues its rise towards the long-term highs seen earlier this year. However, Natural Gas futures fell strongly yesterday towards the New York close.
  • Major cryptocurrencies are continuing their bearish consolidation patterns, with Ethereum looking especially prone to a major technical bearish breakdown.
  • The European Central Bank will announce its Main Refinancing Rate and release its Monetary Policy Statement later today. It is generally expected that there will be no rate hike today, but the statement is likely to give clues about a hike in the coming months.
  • Global stock markets are mixed, with US and European markets choppy, but Asian markets mostly higher over the day. The strong advance by the Nikkei 225 index is due mostly to the sharp fall by the Japanese Yen.
  • Daily new coronavirus cases globally fell last week, continuing a long-term trend.
  • It is estimated that 65.9% of the world’s population has received at least one dose of a coronavirus vaccination, while approximately 6.8% of the global population is confirmed to have contracted the virus at some time, although the true number is highly likely to be much larger.
  • Total confirmed new coronavirus cases worldwide stand at over 538.1 million with an average case fatality rate of 1.18%.
  • The rate of new coronavirus infections appears to now be significantly increasing only in Chile, Israel, and Vanuatu.
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