- The USD / JPY continued to advance higher at the start of Tuesday’s North American session.
- The momentum was bolstered by speculation about further policy easing by the BoJ.
- The continued weakness of the US dollar and worsening trade relations between the United States and China limited further gains.
USD / JPY hit levels above 108.00, or more than a month in the past hour, although it quickly fell a few pips thereafter.
The latest optimism over the encouraging data on the coronavirus vaccine trial weighed heavily on the Japanese yen refuge and helped the pair gain ground for the second consecutive session on Tuesday.
The intraday sale around the JPY accelerated after the Bank of Japan (BoJ) called for an unexpected meeting on Friday, which fueled speculation about more extraordinary policy easing.
Strong positive momentum brought the USD / JPY pair to the highest level since April 13. However, the bulls struggled to find acceptance above the 108.00 mark as relations between the United States and China deteriorated.
This coupled with fears about the second wave of coronavirus infections has further worked together to cap the USD / JPY pair. Meanwhile, a weaker opening on the US stock markets caused a sudden drop of around 25-30 pips in the past hour.
The intraday pullback has found some support near the 107.80 region as investors await a new catalyst from Fed President Jerome Powell and US Treasury Secretary Steven Mnuchin’s testimony in Congress.