CURRENCIES: ING Says Japan's Yen May Remain A G10 Underperformer
06:20 AM EST, 02/08/2021 (MT Newswires) -- ING said that the Japanese yen's (JPY) inability to cash in on choppy risk sentiment shown the last week had still left it rather vulnerable to equity rallies in the past few days.
With virtually all currencies benefiting from the U.S. dollar (USD) drop after Friday's non-farm payrolls data in the United States, USD/JPY remained supported, as U.S. Treasury (UST) yields kept inching higher and financial markets saw increased likeliness of a U.S. aggressive fiscal stimulus, added the bank.
Looking ahead, the yen might remain an underperformer in G10, especially if the approval process on U.S. President Joe Biden's fiscal relief bill progressed further and U.S. inflation kept recovering, all of which could keep UST 10-year supported, noted ING.
On the domestic side, the story might be a bit more supportive for the yen as the COVID-19 lockdown in some key areas of Japan (including Tokyo) appeared to be yielding good results as cases kept dropping. In the current environment, a decisive move below 105.00 in USD/JPY didn't appear very likely, according to the bank.