U.S. dollar outplays Japanese yen as investors are anticipating remarks of Fed chair

US dollar

The Japanese yen was depreciated by a much stronger U.S. dollar on Tuesday’s trading session just five weeks before the much anticipated remarks of U.S. Federal Reserve Chair Janet Yellen. The comments are expected to highlight her upbeat views on the future economic health of the nation.

The greenback edged higher to the Japanese yen at 112.075 yen on the day. This is considered its best level since May 24. On the previous trade, it was also marginally up versus the yen at 111.88.

Figures in the United Sates that were released last Monday gave investors a motive to be watchful about buying the dollar. Fresh orders for capital goods from the U.S. were unexpectedly lower for the month of May and it also dragged down shipments. This suggests a loss of momentum in the production sector halfway through Q2.  Senior currency strategist at Brown Bother’s Harriman in Tokyo Masashi Murata says that the dollar did not display any firm upward momentum, regardless of breaking the 112 level.

Fed Chair Janet Yellen is set to take part in the talks later at the Royal Academy in London. Regardless of the previous batch of poor economic data in the United States, there are positive views that still support the expectations that the Federal Reserve will incite another interest rate hike this year.

Global-info Co’s director at foreign exchange research Kaneo Ogino said that hedge funds are already selling the Japanese yen this week, the upbeat remarks from Yellen could give them reason to further sell.

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