The Japanese Yen is one of the so-called ‘haven currencies’. This means that investors buy the currency when the general financial market is falling or, entering into a period of heightened fear.
Look at the USDJPY. The FX rate nosedived dramatically in the fourth quarter of 2018 when equity markets slumped. The rate plunged a blockbuster 900 points – from 113.0 to 104 – in a matter of days. Traders (and automated algo perhaps?) piled into the Japanese Yen.
With the risk sentiment now slowly recovering, the Japanese Yen is weakening once more. The last week saw the rate probe the 112.0 resistance again with another upside breakout in the making (see Featured Chart).
Interestingly, some of other JPY-related pairs are breaking out too, for example, the EURJPY. This rate found support at 124.0 which led to a strong upward dynamic above 126.0. The near-term target is at 128.0
For a more speculative pair, the AUDJPY appears interesting. The rate had been ranging sideways for some time before a disequilibrium emerged last week. This is the first positive breakout above the psychological 80.0 level this year. So unless the latest upmove is countermanded, I expect a further leg up from here.
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Jackson has over 10 years experience as a financial analyst. Previously a director of Stockcube Research as head of Investors Intelligence providing market timing advice and research to some of the world largest institutions and hedge funds.
Expertise: Global macroeconomic investment strategy, statistical backtesting, asset allocation, and cross-asset research.
Jackson has a PhD in Finance from Durham University.