USD/JPY has today hit its highest level since December 2018, extending the upward move evident earlier in the year. Economists at Rabobank expect the pair to pounce the 113.70 December 2018 peak on an erosion of the 113.00 psychological level.
Nikkei 225's impressive increase puts additional weight on the safe-haven JPY's shoulders
“The move higher in US yields has enhanced the outlook for the USD vs. the JPY which in turn provided support for Japanese exporters and the Nikkei 225. Japanese firms were also relieved by the suggestion from PM Kishida that he is not intending to hike capital gains tax.”
“Considerable uncertainties remain over the economic policies of the new PM and these will seep through into business confidence, growth and potentially BoJ policy and the JPY over the medium-term.”
“A break of the 113.00 psychological level could put the December 2018 high in the 113.70 region in play.”