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UAE Presidents Foreign Policy Advisor: The UAE is exercising restraint and seeking a way out for Iran and the region.The UAE presidents foreign policy advisor said Irans accusations against the UAE are "part of its unwise and chaotic policy."On March 15, S&P Global Ratings affirmed Saudi Arabias sovereign credit rating, adding that despite disruptions, non-oil growth momentum and related non-oil revenues should help support the economy. S&P stated that Saudi Arabia should be able to withstand the impact of the current conflict with Iran. S&P noted that the country should be able to shift oil exports to the Red Sea, utilize its vast oil storage capacity, and increase oil production post-conflict. The Saudi government should also be able to adjust investment spending related to "Vision 2030," a strategic framework launched by the country in 2016.On March 15th, Matt Reed, Vice President of the geopolitical and energy consultancy Foreign Reports, stated that an attack on Kharg Island could trigger Iranian retaliation against Gulf oil-producing countries. He said, "Iran will retaliate in kind." The United States warned on Friday that if Iran continues to block the Strait of Hormuz, Kharg Islands oil facilities could become the next target. Reed warned that the longer the conflict continues, the harder it will be to find alternative energy supplies. "At least 10 million barrels of oil are trapped in the Gulf every day, plus more than 4 million barrels of refined petroleum products and tens of billions of cubic feet of liquefied natural gas, with no easy alternatives." The International Energy Agency has announced the largest emergency oil reserve release in history, with 32 member countries planning to release approximately 400 million barrels of oil. However, Reed believes this measure will have limited effect, stating, "By the time the oil gets to the market, it may be too little, too late." He described it as nothing more than a "band-aid."On March 15th, local time, the Iranian Islamic Revolutionary Guard Corps issued a statement saying that in the past 48 hours, the US and Israel had launched attacks on several civilian industrial facilities in Iran, resulting in the deaths of several workers. The statement said that after setbacks in its confrontation with Iran, the US and Israel have turned to attacking non-military industrial facilities. Iran warned that US companies in the region should withdraw from their facilities and urged nearby residents to stay away from industrial areas with US capital involvement to avoid potential attacks.

USD/JPY Falls to Roughly 123.50 as US Treasury Yields Decline

Larissa Barlow

Apr 07, 2022 10:09

  • USD/JPY has fallen to around 123.50 as declining US Treasury rates erode the greenback's value versus the yen.

  • After reaching a three-year high of 2.66 percent, the 10-year US Treasury yields attracted bids.

  • The IIMF has argued for a lengthy period of ultra-loose monetary policy for the BOJ.

 

The USD/JPY pair has fallen strongly in the Asian session to about 123.50 after bouncing around a small range of 123.71-123.93 over the previous day. Thursday's trading session is exhibiting a bearish open rejection-reverse pattern. The USD/JPY began at 123.80, climbed higher to 123.93, and then fell rapidly to a low of 123.50 as yen bulls attacked the asset.

 

Market players have offered the asset as a result of the low performance of US Treasury yields on Thursday. The benchmark 10-year US Treasury yields have fallen from 2.66 percent highs, but the 2-year US Treasury yields, which are more sensitive to interest rates, have come under pressure. Bears gained control of Treasury yields as market investors dismissed the hawkish Federal Open Market Committee (FOMC) minutes.

 

Meanwhile, the International Monetary Fund (IMF) study recommends that the Bank of Japan (BOJ) maintain its ultra-loose monetary policy for an extended period of time. Increased commodity prices and a recovery in spending patterns may pressurize the BOJ to lower interest rates, but maintaining a steady dovish approach will benefit the economy. Apart from that, the IMF downgraded Japan's economic growth forecast for 2022 to 2.4 percent from 3.3 percent in January.

USD/JPY

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