Last week was a disturbing one in Forex market. This uncertainty will result in turbulent trade of USD. Last week, USD/JPY failed to satisfy the expectations of the traders. Traders do not find trade that much motivating and appealing. The current scenario is affecting the major currencies and their counter-currencies.
Bond yield & trade of USD/JPY:
It seems that the Fed is about to take some serious measures to deal with the uncertainty prevailed in the society. The actions and policies of Fed severely affect the value of USD. The yield on Bond seems to be pulled back in the near term. This two-way price policy of the bond is likely to influence the trade of USD. Particularly Bond Yield will affect the short-term trade of USD. Obviously USD will feel somewhat less charming as compared to Japanese Yen. JPY mostly follows the trading state of USD. Right now the Fed is adaptable and obliging and it is going to be like this for some time.
Fiscal Policy & Biden:
Now all the traders are keeping a close watch on the economic state of U.S.A. the fiscal policy is going to be another influencing factor in this situation. Bien is about to declare an expected Relief Package of about $2 trillion. Biden is trying to stabilize the economy and the relief package is on his planner. However this declaration will hamper USD from breakout.
Near-term and USD/JPY:
Right now the current situation is acting as a hurdle in the path of recovery of USD/JPY. An expected fall in the yield of USD is hinting a retreat of USD/JPY below 104. Currently the support for short-term trade lies on 103.50 which is the lowest value of this week. The overall trend of trade is mixed and about 56% traders are right now net long.