Home Fundamental Comment Yen strengthens on weaker stock markets, dollar inches lower

Yen strengthens on weaker stock markets, dollar inches lower

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Yen strengthens on weaker stock markets, dollar inches lowerThe yen strengthened against major currencies on Tuesday trading session as the drop in stock markets enhanced haven demand on the Japanese currency.

Asian shares resumed its drop for a seventh straight session, where the MSCI Asia Pacific Index set for its longest losing streak since September.

European shares opened lower on Tuesday, tracking losses in U.S. shares last night, on speculations the Fed may raise interest rates earlier than anticipated after the release of buoyant nonfarm payrolls figures on Friday.

Worries from Greece persisted as the government in Athens still plays games with its creditors to reach a compromise deal.

The government will focus on all the potential effects of weak yen on small business and households, Japanese Prime Minister Shinzo Abe said on Monday.

As for the dollar, it resumed its drop for a second straight session against the yen as U.S. two-year Treasury yields have slipped near its pre-jobs data levels.

A sell off in the dollar was sparked on Monday after reports signaling President Barack Obama was worried about the dollar’s strength.

USDJPY

By looking at the USDJPY four-hour chart, it is clear that the pair has dropped after the breakout of the support line to hit a low of 123.84.

The bearish crossover between SMA 7 and SMA 15 supported the downside tendency, while the drop in the RSI 14 below the 50 line gave some momentum.

The pair is predicted to hover between key support at 123.40 and key resistance at 124.80.

USDJPY H4 fxcomment June 9, 2015

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Ahmed Mamdouh Ahmed Mamdouh, Co-Founder and Head of English Fundamental Analysis at FXComment.com, with 7 years of experience in the financial markets. Mamdouh holds a Master’s Degree in Economics from The American University in Cairo and a Bachelor Degree in Economics from The Faculty of Economics and Political Science, Cairo University.

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