The Dollar/Yen was hammered for a second session on Friday, hitting its lowest level since August 31, as investors continued to shed long positions in anticipation of a slower pace of interest rate hikes by the U.S. Federal Reserve.
Although the Forex pair topped at a 32 year high on October 21 after a massive intervention by the Bank of Japan, the Dollar/Yen showed no sign of changing trend until last Thursday’s U.S. consumer price index (CPI) report came in cooler than expected. The news was bearish enough to drive even the strongest bulls out of the market, producing a historical one-day sell-off.
On Friday, the USD/JPY settled at 138.775, down 2.189 or -1.55%. The Invesco CurrencyShares Japanese Yen Trust ETF (FXY) finished at $67.32, up $1.22 or +1.85%.
The Dollar/Yen’s long-term uptrend began on March 20, 2020 with the start of the global COVID-19 pandemic. Last week’s price action suggests it may be coming to an end…