Skip to content

CFDs are leveraged products. CFD trading may not be suitable for everyone and can result in losses that exceed your deposits, so please consider our Risk Disclosure Notice and ensure that you fully understand the risks involved. CFDs are leveraged products. CFD trading may not be suitable for everyone and can result in losses that exceed your deposits, so please consider our Risk Disclosure Notice and ensure that you fully understand the risks involved.

USD/JPY climbs to two-month high amid hopes of recovery

The US dollar spiked up higher for the fourth straight day against the Japanese yen, as investors remain buoyed by the reopening of economies.

Source: Bloomberg

The US dollar rallied for the fourth consecutive day against the Japanese yen.

The fiat currency climbed nearly 1.5% since the start of the week, and is trading at a two-month high of ¥109.088 as at 04:30 ET on Thursday 04 June.

USD/JPY ‘driven by interest to let go of safe haven yen’

This latest rally has taken place amid growing anticipation regarding the reopening of the US and other major economies, says IG Asia analyst Pan Jingyi.

‘With USD/JPY (大口), prices had continued on a tear, driven primarily by the market interest to let go of the safe haven yen amid the improvement in risk sentiment,’ Pan explains.

‘The theme of reopening optimism continues to reign strong into this week within the FX market. Momentum trading also underpins the rally for the currency pair.’

In the near-term, Pan foresees a broad resistance zone of between ¥109.600 and ¥110.000 – prices last seen in late 2019 and early 2020.

Gain access to USD/JPY (大口), AUD/USD and hundreds of forex pairs via IG's world-leading trading and investments platform. With CFDs (read about CFDs here), you can buy long or sell short on forex, equities, indices and more depending on whether you think prices will rise or fall. Start today by opening a live or demo IG account.

Similarly, the ongoing optimism had also driven US equity markets to close higher between Monday and Wednesday, with the three main stock benchmarks S&P 500, Dow Jones Industrial Average and Nasdaq 30 finishing Wednesday up 1.36%, 2.05% and 0.78%.

This upward trend is also despite current civil unrest within both the US and China (Hong Kong) in response to recent social and political issues, which appear to have minimal impact on investor sentiment for now.

USD tends to decline against the yen during uncertainty

As evident throughout the Covid-19 pandemic, whenever there was uncertainty and volatility in the markets, the greenback tended to decline against the yen, with investors preferring to accumulate the yen.

In February this year – when the virus first started to spread within the US, and uncertainty and panic were high, the USD had plummeted nearly 10% across a two-week period to a two-year low of under ¥105.000.

On the flipside, when the coronavirus death rates reportedly began to show signs of slowing down globally in April, the USD then rallied back above ¥109.000 – a level not seen until this latest rally.

How to trade USD/JPY with IG

Learning how to trade any market can seem daunting, so we’ve broken forex trading down into some simple steps to help you get started:

The information on this page does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. IG Bank S.A. accepts no responsibility for any use that may be made of these comments and for any consequences that result. No representation or warranty is given as to the accuracy or completeness of this information. Consequently any person acting on it does so entirely at their own risk. Any research provided does not have regard to the specific investment objectives, financial situation and needs of any specific person who may receive it and as such is considered to be a marketing communication. Although we are not specifically constrained from dealing ahead of our recommendations we do not seek to take advantage of them before they are provided to our clients. See full non-independent research disclaimer.

Start trading forex today

Find opportunity on the world’s most-traded – and most-volatile – financial market

  • Trade spreads from just 0.6 points on EUR/USD
  • Analyse with clear, fast charts
  • Speculate wherever you are with our intuitive mobile apps

See an FX opportunity?

Try a risk-free trade in your demo account, and see whether you’re onto something.

  • Log in to your demo
  • Take your position
  • See whether your hunch pays off

See an FX opportunity?

Don’t miss your chance – upgrade to a live account to take advantage.

  • Get spreads from just 0.6 points on popular pairs
  • Analyse and deal seamlessly on fast, intuitive charts
  • See and react to breaking news in-platform

See an FX opportunity?

Don’t miss your chance. Log in to take your position.

Live prices on most popular markets

  • Forex
  • Shares
  • Indices

Prices above are subject to our website terms and agreements. Prices are indicative only. All shares prices are delayed by at least 15 mins.

You might be interested in…

Find out what charges your trades could incur with our transparent fee structure.

Discover why so many clients choose us, and what makes us a world-leading provider of CFDs.

Stay on top of upcoming market-moving events with our customisable economic calendar.