Usdjpy Close To Yearly High After Fed Comments

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Usdjpy Close To Yearly High After Fed Comments

USD/JPY Close To Yearly High After Fed's Hawkish Comments

The USD/JPY pair has extended its gains for the 5th day in a row and currently trades above the 151 handle. The pair is very close to challenging 151.72, which is also the highest level of the last 13 months.

Some other things that allowed the pair to jump higher were the increase in 10-Y bond yields and the comments from Powell. In addition, the 30-Y bond auction of the USA was weak at best, which also sent the yields higher.

All of these factors have allowed the USD/JPY to trade higher, near 151.50, with a gain of almost 0.11%. To say that the Japanese Yen is struggling wouldn't be wrong, as the USD/JPY is at yearly highs.

Inflation Remains Relevant For USD

Although the Powell comments are old news now, the market players are still trying to digest it all. The signal from Powell's comments is that inflation is still the relevant theme, which also means higher rates are here to stay.

The comments have also raised fears that the current policy measures are still not enough to contain and bring down inflation. As a result of these comments, the yields on US bonds have surged along with the USD/JPY as well.

Elsewhere, the UoM's data allowed the market sentiment to improve a little bit. This also allowed the yields on the US bonds to retreat a little bit. The UoM's data showed that the USA's economic outlook is not that good, according to the American citizens.

The UoM's index slid from an earlier reading of 63.8 to around 60.4 (change of -3.4), which suggests that the average USA consumer isn't happy about the economic situation. At the same time, the index also showed an increase of 4.4% in prices.

Now, if we look at Japan, the intervention threats are at all times high as the pair is now more than 100 pips above the 150.00 level. According to analysts, any more depreciation in Yen will force the BoJ to take action.

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