empty
20.04.2022 09:30 AM
USD/JPY: dollar at its 20-year high versus Japanese yen

This image is no longer relevant

Pressure on the yen has returned. On Wednesday morning, USD bulls pushed the pair to the psychological level of 130.

The greenback is getting stronger versus the Japanese yen amid the difference in the monetary policies of their central banks as well as strong divergence between Japanese and US bond yields.

Earlier today, the dollar surged to its 20-year high against the yen. Eventually, USD/JPY skyrocketed to 129.43 and then bounced to 128.615.

This image is no longer relevant

The dollar swelled on hawkish comments by a Fed official, hinting at even more aggressive moves by the US regulator.

The ongoing lockdown in China aimed at curbing the spread of COVID-19 is believed to only make things worse when it comes to global supply chains. Against such a backdrop, inflation will accelerate and the Fed will have to resort to emergency measures to tame it.

In this light, the US Treasury yield has extended the rally. During the Asian session, yields hit the high of 2.981% that was previously recorded in December 2018.

Unlike its American counterpart, the Bank of Japan still sticks to its dovish monetary policy stance. On Wednesday, the regulator offered to buy an unlimited amount of 10-year bonds at 0.25% to defend the yield target.

The Bank of Japan is committed to maintaining yields at around zero percent, which is the main driver for USD/JPY. The pair is now on track for its second monthly rally in a row. USD/JPY grew by 5.8% in March and advanced by more than 5% in April.

Geopolitical uncertainty and the escalation of the Russia-Ukraine conflict are playing on the side of the greenback with demand for the safe haven being on the rise.

Earlier today, USDX increased to 101.01 and then fell to 100.76 versus the basket of 6 major currencies.

The greenback has received additional support from the dovish People's Bank of China. On Wednesday, the Chinese central bank announced it would maintain its benchmark interest rates for corporate and household loans unchanged. In this light, the Chinese yuan dropped against the dollar to its October 2021 low of 6.4115.

Аlena Ivannitskaya,
Analytical expert of InstaForex
© 2007-2025
Select timeframe
5
min
15
min
30
min
1
hour
4
hours
1
day
1
week
Earn on cryptocurrency rate changes with InstaForex
Download MetaTrader 4 and open your first trade
  • Grand Choice
    Contest by
    InstaForex
    InstaForex always strives to help you
    fulfill your biggest dreams.
    JOIN CONTEST

Recommended Stories

US Market News Digest for May 14

IBM stock continues to climb, supported by technical chart signals pointing to a potential move towards the $265.90 level. Investors are showing interest in the company's stock, backed by strong

Ekaterina Kiseleva 12:40 2025-05-14 UTC+2

Europe in the green, Fed under pressure: traders believe in rate cuts

Pause in US-China tariffs lifts sentiment, but concerns remain European stocks rose for the fourth straight session, and global stocks also rose Traders are betting on a Fed rate

Thomas Frank 11:07 2025-05-14 UTC+2

US Market News Digest for May 13

Citigroup shares are posting steady gains after breaking above key technical levels, signaling potential for continued upside. Market participants view the bank's stock as promising amid signs of stabilization

Ekaterina Kiseleva 12:38 2025-05-13 UTC+2

NRG Energy soars after $12 billion deal — new players in energy?

Indices rise: Dow 2.81%, S&P 500 3.26%, Nasdaq 4.35% Stocks outperform safe havens on trade easing Apple rises on report of considering iPhone price hike Wall Street fear gauge dips

Thomas Frank 12:11 2025-05-13 UTC+2

US Market News Digest for May 12

US stock indices are advancing on a wave of optimism surrounding potential progress in trade negotiations between Washington and Beijing. Investors are hopeful that an eventual agreement could ease geopolitical

Ekaterina Kiseleva 15:25 2025-05-12 UTC+2

Hope for Trade Peace: How US-China Talks Have Rocked European Stock Exchanges

Markets rise: US and China are getting closer in trade talks. UniCredit in the green: profit above expectations, forecast raised. Pharmaceuticals weaken: shares of large companies fell by 1-5%. Futures

Thomas Frank 11:02 2025-05-12 UTC+2

US Market News Digest for May 8, 2025. US stock indices close higher on trade deal optimism

Major US stock indices ended the session in the green, supported by statements from Donald Trump indicating progress in negotiations over a major trade agreement. The market interpreted this rhetoric

Ekaterina Kiseleva 14:00 2025-05-08 UTC+2

Gold slips, stocks sink: what India, Germany and the Fed have in common

Equities are falling on stalled tariff agreements ahead of the Fed decision. Gold is sliding on renewed US-China talks. UK and India have clinched a major trade pact. Friedrich Merz

12:36 2025-05-07 UTC+2

US Market News Digest for May 7

The major US stock indices closed in negative territory, with the S&P 500 down 0.8% amid growing uncertainty about trade policy and anticipation of new comments from the Federal Reserve

Ekaterina Kiseleva 12:20 2025-05-07 UTC+2

Gold falls, stocks plunge: What India, Germany and the Fed have in common

Stocks fall on lack of tariff deals ahead of Fed policy decision Gold falls on hopes for US-China trade talks; UK, India reach trade deal after 3-year talks Germany's Merz

Thomas Frank 07:05 2025-05-07 UTC+2
Can't speak right now?
Ask your question in the chat.
Widget callback
 

Dear visitor,

Your IP address shows that you are currently located in the USA. If you are a resident of the United States, you are prohibited from using the services of InstaFintech Group including online trading, online transfers, deposit/withdrawal of funds, etc.

If you think you are seeing this message by mistake and your location is not the US, kindly proceed to the website. Otherwise, you must leave the website in order to comply with government restrictions.

Why does your IP address show your location as the USA?

  • - you are using a VPN provided by a hosting company based in the United States;
  • - your IP does not have proper WHOIS records;
  • - an error occurred in the WHOIS geolocation database.

Please confirm whether you are a US resident or not by clicking the relevant button below. If you choose the wrong option, being a US resident, you will not be able to open an account with InstaForex anyway.

We are sorry for any inconvenience caused by this message.