The Japanese Yen expanded in today’s early trading as Fed chairwoman Janet Yellen’s dovish remarks on Tuesday prompted investors to sell their greenbacks. The currency pair hit a daily low of 112.25.
Yellen’s speech on Tuesday to the Economic Club of New York said that caution must be exercised in hiking interest rates, lessening the possibility of a rate increase during Fed’s upcoming meeting in April. However, Yellen is optimistic on the growth of the US economy.
The dollar experienced a rally in the past weeks due to other Fed officials’ hawkish statements that implied they are eyeing to raise the numbers.
The speculation of a rate increase is now expected in Fed’s next meeting in June.
Yellen’s announcement put the Bank of Japan (BOJ) in a more difficult position, which is battling stagnant deflation amidst strong currency. BOJ’s negative interest rates set in January did very little to help the situation.
Eyes are now on BOJ Governor Haruhiko Kuroda to see what monetary tools he will use to ease the problem. The BOJ may be forced to further lower the interest rates during its policy meeting in April.
The first support was at 111.82 and 111.26 subsequently. The first resistance was at 112.62 and 113.19 subsequently.
The MACD indicator is in a positive location. The price is falling.