25 Nov 2013
USD/JPY: Yen tests six-month lows on risk on trading
FXstreet.com (London) - The yen remains under pressure after testing its six-month lows driven down by strengthening risk appetite. USD/JPY found resistance at JPY101.90 as safety demand for yen was diminished by an accord signed with Iran.
The deal came after intense talks in Geneva with an agreement that Iran will curb some of its nuclear activities in return for about $7bn in sanctions relief.
Iran has agreed to halt enrichment of uranium to medium-grade purity, which can then be further enriched to weapons-grade levels. It will also give greater access to UN weapons inspectors.
The announcement of the deal fuelled a broad risk-on trade that has also helped to cut oil prices on the prospect of eased supply concerns. Brent contracts for January delivery are down 1.17 percent on the day to USD109.75 while WTI January contracts are down 0.88 percent to USD94.01.
The USD/JPY pair has been pushed further by a resurgent US dollar on increased bets that the Fed will move early to taper its USD85bn-a-month asset purchase programme. Speculation was driven on my more hawkish than expected minutes from the Fed’s October meeting that indicated that the central bank could be prepared to trip its purchases in December.
USD/JPY is currently trading at USD101.7300, up 0.45 percent on the day, after highs of USD101.9200.
The deal came after intense talks in Geneva with an agreement that Iran will curb some of its nuclear activities in return for about $7bn in sanctions relief.
Iran has agreed to halt enrichment of uranium to medium-grade purity, which can then be further enriched to weapons-grade levels. It will also give greater access to UN weapons inspectors.
The announcement of the deal fuelled a broad risk-on trade that has also helped to cut oil prices on the prospect of eased supply concerns. Brent contracts for January delivery are down 1.17 percent on the day to USD109.75 while WTI January contracts are down 0.88 percent to USD94.01.
The USD/JPY pair has been pushed further by a resurgent US dollar on increased bets that the Fed will move early to taper its USD85bn-a-month asset purchase programme. Speculation was driven on my more hawkish than expected minutes from the Fed’s October meeting that indicated that the central bank could be prepared to trip its purchases in December.
USD/JPY is currently trading at USD101.7300, up 0.45 percent on the day, after highs of USD101.9200.