USD/JPY: Dollar grinding back up after risk aversion buoys Yen
- Dollar rally shortlived as Yen maintains safe haven status.
- The pair heads into European markets back in yesterday's range.
USD/JPY has begun clawing back after risk appetite evaporated during early Tokyo trading, and the pair is now trading just above 107.50.
The Dollar rallied following the FOMC's Minutes, which relayed a positive outlook for economic growth and inflation prospects within the US economy, but the Greenback's gains leaked out of USD/JPY in Tokyo trading as risk aversion continues to send the Yen higher.
The Yen is still the market's favourite safe haven, but continuous talking points from the Bank of Japan (BOJ) and notable figures from the central bank have been very busy telling markets that now is not the time to buy the Yen, with their language ramping up last week to include thinly-veiled threats of market intervention should the Yen continue to gain in markets.
The sooth-talking appears to be working, and while the Yen is still the go-to safe haven, the currency is certainly quicker to release its grip following bouts of risk aversion.
USD/JPY Technicals
The pair is still deeply bearish on the heels of the Yen's recent strengthening, despite four straight days of Dollar gains in the broader market. Last Friday saw the pair reach 105.55, a 14-month low, and USD/JPY sees itself still far below the 200-day SMA, and a declining channel still in place, though incredibly steep. Support is currently priced in at 107.15 and 106.72, with resistance forming a zone between 107.90 and 108.27.