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  • USD/JPY loses its grip as US equities dump into the close.

USD/JPY is currently trading at 106.45 as the pair falls on the back of the US dollar picking up a bid following a rout in precious metals and a late session sell-off inequities.

USD/JPY had been driven higher from a low of 105.87 to a high of 106.68 where it met supply when US benchmarks collapsed into the 11th hour.

Despite the news that President Trump is considering tax cuts on capital gains or the news that hospitalisations have fallen in California and New York and some more conciliatory tones from China regarding US-China tensions, equities still dropped lead by gold and silver dumping.

  • Nasdaq unofficially closes down 192.26 points, or 1.75%, at 10,776.10.
  • DJIA unofficially closes down 103.16 points, or 0.37%, at 27,688.28.
  • S&P 500 unofficially closes down 26.94 points, or 0.80% , at 3,333.53.

The USD/JPY had returned to trading narrow ranges in consolidation of late following what had been presumed to be Japanese fund managers buying USD/JPY below 105.

The latest MoF data did show a pick-up in Japanese foreign bond buying.

Meanwhile, with the Federal Reserve expected to continue with its reflation exercise by keeping rates low, driving inflation higher,  then USD/JPY would likely continue to fall towards 100.   

However, if the US dollar finds fresh legs on renewed risk aversion when stocks plummet and gold follows suit, then the yen may be less favoured once again as the greenback’s safe-haven status is replenished. 

USD/JPY levels