Fears over the coronavirus are inflating prices for safe haven assets like the Japanese Yen. The VIX fear index rose from 15 to almost 47 for the last two weeks. The Yen is one of the beneficiaries. The Japanese currency strengthened from 112.2 to 105 against the Greenback or to the almost unprecedented amount of 6.4%, which has not been seen since 2016. The market has raised a fried egg flag. Investors are inspired by the weakening US Dollar due to the interest rates cut in the United States from 1.75% to 1.25% and a further possible cut on March 18. Futures on the Target rate probabilities on Chicago Mercantile Exchange are reflecting a 100% probability for a rate cut to 0.75% this March. Such expectations are pressing the yield of the US bonds down to 0.74% from 1.68% where they stood back in February. These incentives lessen the main advantage of the US Dollar against the Yen I credit swap operations for the US assets purchases.
From the technical point of view, if the Japanese Yen dives below the 105 level, the result maybe even more strengthening of the Yen to 104.4 where an upward correction might be expected. This strong support level was tested twice in 2018 and 2019 when the peak of risk related to the US-China trade tensions was recorded.
Analysis and opinions provided herein are intended solely for informational and educational purposes and don't represent a recommendation or investment advice by TeleTrade.
Indiscriminate reliance on illustrative or informational materials may lead to losses.
We are ready to assist you in every step of your trading experience
by providing 24/5 multilingual customer support.
Risk Warning: Trading Forex and CFDs on margin carries a high level of risk and may not be suitable for all investors. CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 75.19% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money. Prior to trading, you should take into consideration your level of experience and financial situation. TeleTrade strives to provide you with all the necessary information and protective measures, but, if the risks seem still unclear to you, please seek independent advice.
© 2011-2023 Teletrade-DJ International Consulting Ltd
This website is operated by Teletrade-DJ International Consulting Ltd, which is registered as a Cyprus Investment Firm (CIF) under registration number HE272810 and is licensed by the Cyprus Securities and Exchange Commission (CySEC) under license number 158/11. Teletrade-DJ International Consulting Ltd is located at 88, Arch. Makarios Avenue, 2nd floor, Nicosia Cyprus.
The company operates in accordance with the Markets in Financial Instruments Directive (MiFID).
The content on this website is for information purposes only. All the services and information provided have been obtained from sources deemed to be reliable. Teletrade-DJ International Consulting Ltd ("TeleTrade") and/or any third-party information providers provide the services and information without warranty of any kind. By using this information and services you agree that under no circumstances shall TeleTrade have any liability to any person or entity for any loss or damage in whole or part caused by reliance on such information and services.
TeleTrade cooperates exclusively with regulated financial institutions for the safekeeping of clients' funds. Please see the entire list of banks and payment service providers entrusted with the handling of clients' funds.
Teletrade-DJ International Consulting Ltd currently provides its services on a cross-border basis, within EEA states (except Belgium) under the MiFID passporting regime, and in selected 3rd countries. TeleTrade does not provide its services to residents or nationals of the USA.
Material posted here is solely for information purposes and reliance on this may lead to losses. Past performances are not a reliable indicator of future results. Please read our full disclaimer.CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 75.19% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.