The US Dollar held near to a 3½ month peak against the Japanese Yen during early trade in Japan, extending last night’s gains. Market expectations of a stimulated US economy led by President-elect Donald Trump are helping to give the Dollar a solid boost. Thus far, the Dollar is poised to close out the week with a 3.6% gain over the Yen, despite the safe haven currency’s push higher in the immediate wake of the surprise US election outcome. Analysts now believe that Trump’s policies could eventually ratchet up inflation and that has helped push Treasury yields on US long-dated bonds to a 10-month high.
As reported at 10:41 am (JST) in Tokyo, the USD/JPY was trading at 106.742 Yen, a gain of 0.03%; the pair earlier hit a high of 106.950 Yen, a level not seen late July 2016. The GBP/USD was down 0.05% to trade at $1.2536, off the session low of $1.2531.
Yen Outlook Dependent upon Trump Policies
Analysts say that if a Trump presidency pushes through a protectionist trade agenda the Japanese Yen could rally as a safe haven destination with the USD/JPY pair likely moving lower than the 100 level. The AUD/USD was down 0.22% to trade at $0.7594; analysts say that that is largely the impact of a risk sensitive market; the pair is likely to see a weekly decline of about 0.8% if the Aussie Dollar continues to succumb to the pressure of uncertainty.