Yen Recovery Cut Short After Biggest Four-Day Advance Since 2020
- Resurgent Japanese currency came close to its 100-day average
- Options market suggests traders not positioned for more gains
A customer holds Japanese 1,000 yen banknotes at a supermarket in Tokyo.
Photographer: Kiyoshi Ota/BloombergThe dramatic recovery staged by the Japanese yen over the past week looks to be coming to a sputtering halt, keeping intact for now a key resistance level that’s held firm throughout this year.
The yen on Monday chalked up its strongest four-day run since the early days of the Covid pandemic and was on course for a fifth daily gain on the back of rising geopolitical concerns in Asia before an abrupt turnaround in risk sentiment that’s seen Treasury yields surge and the dollar along with them. The arrival of US House Speaker Nancy Pelosi in Taiwan, whose imminent visit had been fueling risk aversion, was accompanied by a recovery in investors’ risk appetite even as China outlined various measures in response.