Yen trades at multi-decade lows

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The Japanese Yen continued to weaken against the US Dollar, with the USDJPY pair reaching its highest level since 1990, near 152.00 early Wednesday.

Investors will keep a close eye in the pair’s action amid growing risk of a central bank intervention.

Elsewhere, the European Commission will release consumer and business sentiment data for March, the US economic docket will not feature any high-tier data releases, while Fed Governor Christopher Waller is scheduled to speak later in the American session.

Several Bank of Japan and Japanese government officials crossed the wires during the Asian trading hours on Wednesday, looking to limit the JPY weakness with verbal interventions.

Finance Minister Shunichi Suzuki repeated that they won’t rule out any steps, including decisive ones, to respond to disorderly moves in the foreign exchange market.

After coming within a few pips of 152.00, USDJPY edged slightly lower, but stabilised above 151.50. BoJ board member Naoki Tamura said that they may hike rates again if upside risks to trend inflation, price outlook heighten, or the likelihood of stably hitting price goal rises further.

USD Index rebound

The USD Index staged a rebound in the American session on Tuesday and registered marginal daily gains. The index holds steady above 104.00 early Wednesday.

The benchmark 10-year US Treasury bond yield continues to fluctuate in a tight channel above 4.2% and US stock index futures trade in positive territory in the European morning.

EURUSD lost its traction and retreated below 1.0850 in the American session on Tuesday to end the day virtually unchanged. The pair was moving up and down in a narrow band above 1.0800 in the early European session.

GBPUSD failed to preserve its recovery momentum on Tuesday and closed in the red. The pair was on the back foot early Wednesday and edged lower toward 1.2600. The Bank of England will release the Financial Policy Committee statement later in the day.

Gold reversed its direction after testing $2,200 on Tuesday and retreated below $2,180, remaining confined in narrow band below the $2,200 mark, as the bullish bias seems intact.

XAUUSD is in a consolidation phase early Wednesday.

(Source: OANDA)