Anna 
The Japanese Yen (JPY) has rebounded, reaching a fresh daily peak against the US Dollar (USD) as it recovers from a year-to-date low. This resurgence is attributed to the Bank of Japan’s (BoJ) recent hawkish comments, indicating that conditions for phasing out extensive stimulus and lifting short-term rates from negative territory are aligning. The JPY is further supported by persistent concerns about geopolitical tensions related to conflicts in the Middle East and apprehensions about slowing growth in China, which enhance the JPY’s appeal as a relative safe-haven.
Conversely, the USD struggles to maintain its intraday uptick, facing resistance ahead of the 100-day Simple Moving Average (SMA) against the JPY. Despite the USD’s recent strength, the BoJ’s hawkish stance and prevailing uncertainties contribute to the JPY’s resilience. However, the growing consensus that the Federal Reserve (Fed) will keep interest rates elevated for an extended period remains a supportive factor for a potential rise in US Treasury bond yields, which could act as a tailwind for the USD.
Market participants are advised to exercise caution, especially with the anticipation of the release of the US ISM Services PMI during the early North American session. The outcome of this economic indicator may influence the dynamics of the USD/JPY pair, warranting attention from traders.
