Japanese Yen Stuck Trading Sideways Against the Weak US Dollar

The  Japanese yen today traded in  a  tight range against the  US dollar despite the  greenback’s overall weakness against other major currencies. The  USD/JPY traded sideways even as  the  Nikkei 225 equity index closed lower for the day despite the risk-on market sentiment.
The  USD/JPY currency pair today traded between a  high of  109.55 and  a  low of  109.43 and  was trading within this range at  the  time of  writing.
The  currency pair’s overall weakness was driven mainly by  the  risk-on market sentiment, which saw investors dump safe-haven assets such as  the  yen and  the  US dollar. The  fact that Japan’s Nikkei closed 0.36% lower at  23,837.72 also did not help the  yen, which was already under pressure. Japanese Prime Minister Shinzo Abe tried to  placate investors saying that the  country’s economy was witnessing a  modest recovery. It also emerged that the  Bank of  Japan had rejected a  proposal by  the  International Monetary Fund to  create a  target inflation range instead of  its current fixed 2% target. Japan already had the  longest-running quantitative easing program in the world. The release of weak Japanese retail sales and  industrial production data for  November also did not help the  pair.
The  fact that the  greenback was also quite weak as  tracked by  the  US Dollar Index did not help the  yen, which is also a  safe-haven currency. The  pair could not replicate yesterday’s bounce, which saw it stuck trading sideways.
The  currency pair’s future performance is likely to  be influenced by  geopolitical events given the  upcoming weekend.
The  USD/JPY currency pair was trading at  109.51 as  at  14:31 GMT having risen from a  low of  109.43. The  CAD/JPY currency pair was trading at  83.73, having rallied from a  low of  83.45.

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