The USD/JPY pair rose on Wednesday, as traders began to sell off the US Treasury market, thus driving up the yield on most notes. As money flow goes, chasing yield is one of the simplest explanations for currency moves. While most forex traders act in a vacuum, the truth is that even thought the market is the largest one – it follows other markets more often than not. In reality, the bond market is the dog, and the forex market the tail. Money goes to where it is treated better, and in this case – that is starting to tilt towards the United States. While it is too early to call this a buy at this point, if we reach 77.50, we feel this pair will keep rising.
Written by FX Empire