USD/JPY regains ground from one-month lows

FXStreet (London) - USD/JPY has regained earlier losses, climbing back to JPY101.3550 to undo the sharp declines as JPY hit its strongest level n a month.

QE tapering reduces equity appetite

The Nikkei took another hammering overnight, falling 4.18 percent. The benchmark equities index has now shed 14 percent since the beginning of the year. The strengthening yen has helped to fuel the sell off as investors look to cut their equity positions. As the Federal Reserve remains on its path of relative tightening with monthly tapering of its quantitative easing asset purchases, Japanese stocks are likely to remain under pressure.

JPY appreciation not welcomed by Abe and Kuroda

With market volatility thinning out the short USD/JPY carry trade the pair may struggle to regain its bullish momentum despite attempts by Prime Minister Shinzo Abe and Bank of Japan Governor Haruhiko Kuroda to jawbone the yen down, with JPY strength eating into meagre Japanese inflationary pressure.

USD/JPY is currently trading at JPY101.3550, up 0.224 percent on the day in mild bullish trading.