The Japanese Yen has been gaining momentum in the forex market as US yields and Wall Street futures drop. This comes as the USD/JPY heads for the third weekly loss in a row, and to the lowest daily close in a month.
One of the factors contributing to the rise of the Yen is the decline in US yields. The 10-year US Treasury yield has fallen to around 1.7%, which is down from its recent high of 1.75%. This has led to a decrease in the attractiveness of the US dollar as a safe-haven currency, as investors look to the Yen for its stability.
Another contributing factor to the Yen’s rise is the drop in Wall Street futures. Futures for the Dow Jones, S&P 500, and Nasdaq have all fallen, indicating a potential decline in the US stock market. This has led investors to seek out the Yen as a safe-haven currency, as it tends to perform well during times of market volatility.
US Industrial Production stagnates in February
Adding to the Yen’s rise is the news that US Industrial Production stagnated in February, against expectations of a 0.2% increase. This is the latest sign of a slowdown in the US economy, which could potentially lead to a further decrease in US yields and a continued rise in the Yen.
Industrial production is an important economic indicator as it measures the output of the US manufacturing, mining, and utility sectors. The lack of growth in this area suggests that there may be a decrease in consumer demand, which could have a negative impact on the overall US economy.
USD/JPY heads for the third weekly loss in a row
As a result of these factors, the USD/JPY is heading for the third weekly loss in a row, and to the lowest daily close in a month. This means that the Yen is strengthening against the US dollar, which could potentially lead to a decrease in Japanese exports and a slowdown in the Japanese economy.
However, it is important to note that the Yen’s rise may not be sustainable in the long term. The Bank of Japan has been actively working to weaken the Yen in order to boost the Japanese economy, and may intervene in the forex market if the Yen continues to strengthen.
In conclusion, the Japanese Yen has been gaining momentum in the forex market due to a drop in US yields and Wall Street futures, as well as the stagnation of US Industrial Production in February. This has led to a decrease in the attractiveness of the US dollar as a safe-haven currency, and investors have turned to the Yen for its stability. While the Yen’s rise may not be sustainable in the long term, it is important for investors to keep an eye on these economic indicators in order to make informed trading decisions.