The Japanese yen continues to retreat on a calm Monday

• Monday’s markets opened on a calm note after recent volatility.
• The yen corrected after a recent rally.
• Markets are awaiting the BoJ’s next move before making any decisions.

The Japanese yen (JPY) continued to fall on Monday, falling to a one-week low against the US dollar (USD) as markets eased off the JPY pedal. The Bank of Japan’s (BoJ) recent pivot to the highest interest rate in years, near 0.25%, saw a large-scale unwinding of the yen trade. Coupled with a recent scramble of “Yenterventions” to defend the yen, the JPY is up more than 12.5% ​​from multi-decade lows against the greenback.

Market focus will turn to US inflation data this week, with traders eyeing a further consumer price index (CPI) inflation print on Wednesday. Japanese Gross Domestic Product (GDP) figures are also due later in the week and could give markets a signal about how the BoJ intends to go about the business of trying to keep growth and inflation in Japan on the positive side.

USD/JPY price

A broad yen recovery helped drag USD/JPY down from multi-decade highs, sending the pair below its 200-day exponential moving average (EMA) at 151.84. The pair reached a floor near 142.00 before coming back to test the 148.00 region.

It is still too early to call for a reversal in the yen pair, with bidders returning to the dollar-yen trade and sending bids for a 4.4% rally over the past week and a bit. Continued upside is on the cards as bulls send price action back to the 200-day EMA, with technical support from rising trendlines helping to keep the bullish trend moving in the right direction.

USD/JPY Daily Chart