USD/JPY gains on back of Donald Trump’s speech
The greenback recovered past ¥109.00 after US President Donald Trump’s speech, and has remained above this level throughout Wednesday US time.
The USD/JPY rebounded 0.69% on Wednesday (08 January) late-morning US time, following US President Donald Trump’s speech at the White House in which he stated that Iran ‘appears to be standing down’.
In his speech at the White House, President Trump did not indicate any further military action. He said: ‘No Americans were harmed in last night's attack by the Iranian regime.’
The greenback sunk almost 0.72% to a 12-week low of ¥107.66 overnight on Tuesday (07 January), after Iran reportedly launched two attacks on US military bases in Iraq,
The Iranian counterattack came four days after the US killing of the country’s top military official, Major General Qassem Soleimani.
Short-term bullishness
Prior to that, the currency pair had already begun to rally, due to the attacks not being as significant as first though, wrote IG UK Senior Market Analyst Joshua Mahony.
He added that a rise through Tuesday’s (07 January) peak of ¥108.63 ‘would provide a more bullish short-term view as the pair retraces the wider sell-off from ¥109.71’.
However, there is still a ‘good chance’ that there will be more dips in line with the current trend of lower highs and lows, should that barrier not be broken, he further noted.
Going by that prediction, with the major forex pair currently trading at ¥109.244 as of 09 January, 12.50am EST, a bullish trend looks to be in motion.
IG data supports this sentiment, with a 12% daily increase in the number of short trades, and a three percent drop in long trades.
Focus now on US jobs report
With fears of US-Iran conflict escalation now allayed – assuming the White House maintains its current defence stance - analysts say the focus is now on the US government’s jobs report for the month of December on Friday.
ING Chief International Economist James Knightley wrote that the November report showed job creation was better than expected, but ‘slower growth is likely in December’.
‘Moreover, labour market slack is greater than implied by the unemployment alone, meaning wage growth will remain subdued. The net result implies little upside threat for interest rates,’ he added.
Analysts at AceTrader FX said short-term impact on price movement is also a possibility in the lead up to the release of the report, as several interviews with Fed officials are expected.
This information has been prepared by IG, a trading name of IG Markets Limited. In addition to the disclaimer below, the material on this page does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. IG accepts no responsibility for any use that may be made of these comments and for any consequences that result. No representation or warranty is given as to the accuracy or completeness of this information. Consequently any person acting on it does so entirely at their own risk. Any research provided does not have regard to the specific investment objectives, financial situation and needs of any specific person who may receive it. It has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such is considered to be a marketing communication. Although we are not specifically constrained from dealing ahead of our recommendations we do not seek to take advantage of them before they are provided to our clients. See full non-independent research disclaimer and quarterly summary.
Start trading forex today
Find opportunity on the world’s most-traded – and most-volatile – financial market.
- Trade spreads from just 0.6 points on EUR/USD
- Analyse with clear, fast charts
- Speculate wherever you are with our intuitive mobile apps
See an FX opportunity?
Try a risk-free trade in your demo account, and see whether you’re onto something.
- Log in to your demo
- Take your position
- See whether your hunch pays off
See an FX opportunity?
Don’t miss your chance – upgrade to a live account to take advantage.
- Get spreads from just 0.6 points on popular pairs
- Analyse and deal seamlessly on fast, intuitive charts
- See and react to breaking news in-platform
See an FX opportunity?
Don’t miss your chance. Log in to take your position.
Live prices on most popular markets
- Equities
- Indices
- Forex
- Commodities
Prices above are subject to our website terms and agreements. Prices are indicative only. All share prices are delayed by at least 15 minutes.
Prices above are subject to our website terms and agreements. Prices are indicative only. All shares prices are delayed by at least 15 mins.
