USD/JPY: Mildly bid in Asia after three-day losing streak
- USD/JPY is flashing green amid reports of eurosceptic parties gaining ground in EU elections.
- The pair suffered losses in the previous three trading days, possibly due to slide in Treasury yields.
USD/JPY is reporting modest gains this Monday morning in Asia, having registered losses in the previous three trading days.
The spot is currently trading at 109.50, up 0.20% on the day amid reports that an alliance of pro-EU parties largely held their ground in Sunday’s European elections.
However, a high voter turnout delivered big gains to liberals, Greens and far-right populists.
For instance, in France, President Macro’s party has been bested by Marine Le Pen's far-right National Rally, according to Politico. Further, UK’s Brexit party have come out victorious, while the ruling Conservative Party has been wiped out.
Far right’s gains suggest the bloc will likely continue to struggle with the populist insurgency for years to come.
The European equities, therefore, my struggle to put on a good show later today, limiting the upside in USD/JPY.
The currency pair fell 0.30% to 109.38 on Friday, marking a third consecutive day of losses and the first three-day losing streak since May 9.
The losing run was likely the result of the escalating trade tensions and the resulting haven demand for both treasuries and the Japanese Yen. Notably, the 10-year yield fell to 2.29% last Thursday, the lowest level since October 2017.
The treasury market is observing a trading holiday today. Further, the UK markets are closed today. Thus, liquidity in the FX markets will be thin and any gains in USD/JPY need to be viewed with caution.
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