USD/JPY keeps the red around 133.00 mark amid bank crisis fears, softer USD – by hareshmenghani USDJPY RiskAppetite Fed BOJ Currencies
Concerns about a full-blown global banking crisis benefit the JPY and weigh on the pair.USD/JPY pair
struggles to capitalize on the overnight late rebound from the 132.20 area, or a one-month low and attracts some sellers for the second successive day on Thursday. The pair, however, manages to rebound a few pips from the daily low and trades around the 133.00 mark during the early European session, still down nearly 0.40% for the day.
Despite the positive development surrounding the Credit Suisse saga, concerns about fresh turmoil in the global banking sector continue to drive haven flows towards the Japanese Yen and exert pressure on the USD/JPY pair. The troubled Swiss bank announced that it will exercise an option to borrow up to $54 billion from the Swiss National Bank to shore up liquidity.
Apart from this, a modest US Dollar weakness turns out to be another factor acting as a headwind for the USD/JPY pair, though the prospects for further policy tightening by the Federal Reserve help limit losses. Investors still expect the US central bank to deliver at least a 25 bps rate hike at its upcoming policy meeting on March 21-22. In contrast, the Bank of Japan is expected to stick to its dovish stance to support the fragile domestic economy.
The aforementioned fundamental backdrop warrants caution before placing aggressive bearish bets around the USD/JPY pair and positioning for an extension of last week's rejection slide from the 200-day Simple Moving Average . Traders now look to the
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