- USD/JPY gained traction for the second straight day and climbed to a two-week high.
- Hopes of a ceasefire between Russia and Ukraine undermined the safe-haven JPY.
- Modest USD strength remained supportive ahead of the Russia-Ukraine peace talks.
The USD/JPY pair maintained its bid tone through the mid-European session and was last seen trading near the 115.75-115.80 area, or a two-and-half-week high.
A combination of supporting factors assisted the USD/JPY pair to capitalize on the previous day's strong move up and gain some follow-through traction for the second successive day. The global rush to traditional safe-haven assets that followed Russia’s invasion of Ukraine last week now seems to have abated amid hopes of a ceasefire. In fact, Ukraine's Presidential Adviser said that the delegation is headed for the second round of talks with Russia, which is set to start in a couple of hours. This, in turn, weighed on the Japanese yen and acted as a tailwind for the major amid modest US dollar strength.
Fed Chair Jerome Powell stated on the first day of his testimony before Congress that the US central bank could take tougher action if inflation levels do not come down. Adding to this, Chicago Fed President Charles Evans said that monetary policy is currently wrong-footed and needs to be upwardly adjusted toward neutrality. This, along with concerns about the worsening situation in Ukraine, benefitted the greenback's status as the global reserve currency and further extended support to the USD/JPY pair.
That said, a softer tone around US Treasury bond yields held back USD bulls from placing aggressive bets and kept a lid on any runaway rally for the USD/JPY pair, at least for the time being. Market participants are now looking forward to the US Weekly Initial Jobless Claims data. Apart from that, traders will take cues from Fed Chair Jerome Powell's second day of testimony for some short-term impetus. The focus, however, remains on headlines surrounding the Russia-Ukraine saga, which will play a key role in driving the pair.
Technical levels to watch
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.
The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.
Recommended content
Editors’ Picks
EUR/USD challenges 1.0500 on Dollar's bounce
The US Dollar now picks up further pace and weighs on the risk-associated assets, sending EUR/USD to the boundaries of the key 1.0500 region and at shouting distance from its 2024 lows.
GBP/USD remains weak and puts 1.2600 to the test
GBP/USD remains on the back foot and now approaches the key support at 1.2600 the figure in response to the resurgence of the bid bias in the Greenback.
Gold faces extra upside near term
Gold extends its bullish momentum further above $2,660 on Thursday. XAU/USD rises for the fourth straight day, sponsored by geopolitical risks stemming from the worsening Russia-Ukraine war. Markets await comments from Fed policymakers.
BTC hits an all-time high above $97,850, inches away from the $100K mark
Bitcoin hit a new all-time high of $97,852 on Thursday, and the technical outlook suggests a possible continuation of the rally to $100,000. BTC futures have surged past the $100,000 price mark on Deribit, and Lookonchain data shows whales are accumulating.
A new horizon: The economic outlook in a new leadership and policy era
The economic aftershocks of the COVID pandemic, which have dominated the economic landscape over the past few years, are steadily dissipating. These pandemic-induced economic effects are set to be largely supplanted by economic policy changes that are on the horizon in the United States.
Best Forex Brokers with Low Spreads
VERIFIED Low spreads are crucial for reducing trading costs. Explore top Forex brokers offering competitive spreads and high leverage. Compare options for EUR/USD, GBP/USD, USD/JPY, and Gold.