The proliferation of Chinese coronavirus and current tensions on stock exchanges have made Japanese currency one of the most popular safe-haven assets. Most investors prefer to wait out economic storms, investing in the yen, which is beneficial to the means of payment of the Country of the rising sun.
Currently, the demand for the Japanese currency continues to gain momentum. In the short term, experts expect quotes to rise for two reasons. One of the drivers for raising the yen, analysts believe the positive dynamics of the US currency. Analysts consider the positive dynamics of the US currency to be one of the drivers of the yen's rise. At the same time, the yield spread of us and Japanese government bonds is actively growing, which traditionally provides significant support for the greenback.
Another reason for the potential appreciation of the yen, experts believe, is the growth of the US stock market. This situation has a positive effect on the dynamics of the USD / JPY pair, which usually correlates strongly with the S&P 500 index. At the moment, the United States is experiencing a peak in the corporate reporting season, while American companies are pleased with the market with life-affirming results. Many experts expect the upward trend to continue on the US stock market, hoping to consolidate the S&P 500 above a psychological level of 300 points. However, experts do not exclude that the dollar in the pair USD / JPY will experience serious pressure. It will increase after Japanese corporations begin to convert foreign currency into national currency for increasing profits.
Nevertheless, in a barrel of honey for the yen there is also a fly in the ointment, analysts recall. At the beginning of this week, the Japanese currency slightly lost ground and the pair slid down. However, at the same time, the yen remained within the given framework, without updating the maximum reached at the beginning of the current month. On Wednesday, January 29, the pair fell 0.05% to 109.07. Earlier on Monday, experts recorded a drop to 108.73, the lowest level in three weeks.
The USD / JPY currency pair entered the consolidation range near 108.98 last Thursday with the support level at 108.50. This morning, the currency of the Land of the Rising Sun was trading at 108.88, trying to get out of this framework.
The USD / JPY pair attempt was successful and the tandem went up, moving in small steps towards its goal which is an upward trend. Currently, the pair is running near the levels of 108.92-108.93, demonstrating the direction to the peaks
.According to analysts, in the near future, the Japanese currency will continue the upward trend and recommend buying yen, appealing to its high protective properties. Experts count on the stability of the currency of the Land of the Rising Sun to almost any negative impacts in both external and internal.
