The Japanese Yen softens further, flirting with a break above 160.00.
With pressure building to the upside in USD/JPY, the risk of a hard correction grows.
The US Dollar Index pops higher after some hawkish Fed comments.
The Japanese Yen (JPY) weakens again on Wednesday in a near 10-day losing streak that only had one hiccup on the way up. Traders are dipping their toes in the water to see if the Japanese Ministry of Finance is set to intervene in forex markets. Meanwhile, the Bank of Japan is still unclear on when, how and if it will cut its debt-buying program.
Meanwhile, the DXY US Dollar Index – which gauges the value of the US Dollar (USD) against a basket of six foreign currencies – is stronger with the help from the depreciation of the Japanese Yen. The other heavyweight in the basket, the Euro, is not helping either as uncertainty builds up ahead of the French snap elections on Sunday and German consumer confidence deteriorates further. This gives the DXY a boost from outside help even though the Greenback looks overvalued seeing recent economic data.
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