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Sep 27 - 12:12 PM
USD/JPY - COMMENT-USD/JPY Firm As USD Demand Outpaces Safe Haven Flows
First appeared on eFXplus on Sep 27 - 10:15 AM

USD/JPY is consolidating above 100/10-DMA resistance in the 107.80's, and is eyeing a run toward 108.50 nL2N26I06V, which is near the 50% Fibo of 112.40-104.46 (108.43), and the September 19 high at 108.48.
Indeed, despite the yen's function as a safe haven, with other major currencies like the euro and sterling trolling lower on the back of increased accommodation expected in the Eurozone and lingering political and economic risks related to Brexit, the dollar has a tailwind.
Additionally, USD/JPY's rise may reflect a dearth of dollar supply, also evident in recent UST repo imbalances nL5N26I1OR, as the market shores up balance sheets ahead of Monday's quarter end.
That said, safe-haven flows are likely to get enough of a second wind on macro uncertainties like U.S.-China trade, Brexit and current Trump impeachment rumblings, to temper yen weakness.
Thus, with global ructions not threatening to abate any time soon, expect the yen's safe haven allure to resume, even as other currencies succumb to falling global growth and Brexit-related concerns.
USD/JPY bulls need a rise above 109.19, the 200-DMA and 109.37, the 61.8% Fibo of 112.4-104.46, to regain their edge and make a run at 112.40, April's 2019 high.

JPY Chart: Click here

Refinitiv IFR Research/Market Commentary


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