US dollar rallies against Japanese yen

The US dollar has rallied significantly against the Japanese yen during the trading session on Friday, as the jobs never came out better than anticipated. This lifted interest rates, and of course put a bit of a “risk on” attitude into the markets overall. I think that the markets will continue to be a “by on the dips” situation, so waiting for those dips that, of course makes quite a bit of sense. If we can break above the ¥110 level, the market will more than likely go to the ¥109 level underneath, perhaps giving us an opportunity to pick up even more value. I recognize this pair tends to be very volatile and sensitive to risk appetite as well as geopolitical events, so keep an eye on those.

Trade war fears of course have weighed upon the risk appetite of market participants, but I think that those are starting to abate a bit, as it looks like the reactions will be very measured to what the Americans have done. Furthermore, I think that the US dollar is entering a very bullish phase again, especially when it comes to the Japanese yen as the Bank of Japan is nowhere near doing anything remotely close to looking like tightening. With this in mind, we have a bit of a “perfect storm” if we can keep the headlines under control. Remember that ¥111 was very resistive recently, so I think that it could be again if we can break the ¥110 level.