On Thursday, the USD/JPY remained in the lead.
The pair reaches a 15-month high thanks to a strong US dollar.
Despite positive economic indicators, the yen remains undervalued.
The US dollar’s strong purchasing mentality has pushed USD/JPY to multi-month highs. The pair rallied to 111.12 after hitting a low of 110.43, representing an almost 90-pip move.
The USD/JPY is currently trading at 111.11, up 0.01 percent on the day.
The strong purchasing pressure in the US Dollar was the primary driver of the advance. The US Dollar Index (DXY), which gauges the greenback’s performance versus six major rivals, increased by 0.34 percent to 92.35. The last time these levels were seen was in 2020.
Concerns over the spread of the highly transmissible Delta strain prompted investors to flock to the US currency.
Meanwhile, President Robert Kaplan of the Federal Reserve Bank of Dallas said he would like the Fed to begin reducing its support for the economy before the end of the year in order to avoid a policy tightening shock. The hawkish remarks increase demand for the US dollar.
The Japanese yen, on the other hand, is under pressure as investors boost their holdings in the US dollar. The mood was further sullied by the fact that Japan’s unemployment rate increased by 3% in May.
Meanwhile, Japan’s Consumer Confidence Index rose to 37.4 in June, its highest level since February 2020.
The yen’s prospects are hampered by the growth disparities between the United States and Japan.
To measure market sentiment, investors are waiting for the Japan Tankan Large Manufacturing Index, Jubun Bank Manufacturing PMI, and US Initial Jobless Claims./n
