Yen Dropped Broadly as Treasury Yields Jumped on Hawkish Fed

Action Insight Weekly Report 9-25-21

Yen Dropped Broadly as Treasury Yields Jumped on Hawkish Fed

Yen's fortune reversed last week as US treasury yields accelerate up after hawkish FOMC meeting and projections. US stocks also display strong resilience and closed generally higher, reversing prior losses. Sterling, on the other hand, shrugged off hawkish BoE voting and ended as second weakest. Aussie and Kiwi were not too far away with concerns over China's Evergrande in Asian markets.

On the other hand, Canadian Dollar ended as the best performer, with help from extended rebound in oil price. Swiss Franc and Dollar followed as next strongest. However, it's noted that Dollar's upside momentum hasn't been too convincing. It's a big question on whether the greenback could ride on hawkish Fed to pick up more buying.

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USD/JPY Weekly Outlook

USD/JPY surged sharply higher to 110.78 last week. The break of 110.44 resistance suggests that consolidation pattern from 111.65 has completed already. Initial bias is now on the upside this week. Firm break of 110.79 resistance will target a test on 111.65 high. On the downside, below 110.30 minor support will mix up the near term outlook and turn bias neutral again.

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