USD/JPY Strengthens Following Earthquake and Tsunami
USD/JPY rose around 0.25% to near 159.00 during the European session on Monday (April 20). This was also driven by the weakening of the Japanese yen following a series of natural disasters in Japan. This movement reflected the market's response to increasing uncertainty about domestic risks, while the US dollar remained solid.
At the same time, a 7.3 magnitude earthquake was reported off the east coast of Honshu. NHK also reported a tsunami observed off the coast of Japan. On the operational side, Hokkaido Electric Power stated that there were no abnormalities at the Tomari Nuclear Power Plant following the earthquake, so the market focus was more on the impact of risks and sentiment, rather than disruptions to core facilities.
The yen had weakened earlier in the day amid growing doubts that the Bank of Japan would raise interest rates at its April 28 policy meeting. Investors believe the BoJ is likely to avoid policy adjustments due to concerns about Japan's economic outlook, particularly after negative energy shocks that have heightened the risk of a slowdown.
Meanwhile, the US dollar traded firm as safe-haven demand increased after Iran rejected further negotiations with the US. The dollar index (DXY) rose around 0.1% to near 98.30. Iranian Foreign Ministry spokesman Esmail Baghaei stated that there were no plans for a second round at this time, while a senior Iranian source assessed that the continued US blockade of Iranian ships was eroding the path to peace talks.
Furthermore, the market is also awaiting the confirmation hearing of Kevin Warsh, President Donald Trump's nominee for Fed Chair, before the Senate Banking Committee on Tuesday. Market participants will be closely monitoring Warsh's views on the direction of monetary policy, particularly amid concerns that inflation expectations are "off-anchor" again as oil prices rise. (asd)
Source: Newsmaker.id
