USD/JPY keeps the 108-111 range so far – Danske Bank

Chief Analyst at Danske Bank Jens Pedersen assessed yesterday’s price action around the pair.

Key Quotes

“USD traded slightly weaker last night against other majors driven by a substantial decline in yields on 10Y US treasuries (dropped 10bp) and weak risk appetite in markets”.

“Given the big move in 10Y US yields, the modest decline in USD/JPY from 119.20 to 108.50 is quite noteworthy, as the cross usually tends to track moves in 10Y US treasuries. This could indicate that Japanese investors have already taken a cautious stance and lowered foreign FX exposure given the high uncertainty about the development in North Korea”.

“We still expect USD/JPY to trade within the 108-111 range near term with risks skewed to the downside if the US-North Korean tensions escalates further”.