USD/JPY rises on robust US economic data

Due to risk aversion brought on by Middle East tensions and solid US economic data, the USD/JPY pair has reached a 34-year high. US Treasury rates rose as a result of March’s strong US retail sales, which demonstrated consumer strength.

Japanese officials are nonetheless cautious about the currency’s rapid advancement, though. In early trade, the US dollar continued to gain ground against the Japanese yen, surpassing the 154.00 mark. The USD/JPY exchange rate, however, closed at 154.37, up 0.71, reviving 34-year highs.

Financial markets have become more risk averse as a result of Middle East turmoil, with Bitcoin being the biggest loss because it is still closed. There were no casualties from Iran’s onslaught against Israel, and some US officials have advised Israel not to retaliate.

The USD/JPY last move up was supported by US economic statistics, although it is still not close to breaking the 155.00 milestone.

According to the US Department of Labour, retail sales increased by 0.7% MoM in March, exceeding estimates of 0.4%. This shows a 2.1% rise in Q1 2024 over the same period in the previous year.

The short and long ends of the US Treasury curve are climbing by more than 10 basis points, as the yield on US Treasury bonds is surging. John Williams, the president of the New York Fed, predicts that rate reductions would probably begin this year due to the robust fundamentals influencing consumer spending.