The British Pound extended gains for a second straight day on Tuesday, buoyed by a moderately optimistic market mood as the UK returned from a long weekend. Investor sentiment received a notable boost following US President Trump’s decision to postpone a planned 50% tariff on Eurozone goods.
Meanwhile, the Japanese Yen weakened against major currencies despite Bank of Japan Governor Ueda’s warnings about inflationary risks that keep hopes for further monetary tightening alive.
Adding to the Yen’s downward pressure are escalating fears of a debt crisis in Japan. Reports indicate the Ministry of Finance may cut back on issuing super-long government bonds this fiscal year due to falling demand from traditional buyers, which has driven yields significantly higher. Notably, the yield on the 30-year Japanese government bond fell around 20 basis points during the Asian session, settling at 2.86%, further intensifying negative sentiment toward the Yen.
In the UK, the economic calendar remains light, suggesting that positive market sentiment could continue to support the Pound in upcoming sessions. Bulls are eyeing the 194.25 resistance level, with a breakthrough potentially exposing the May 13 high at 196.25. Key supports lie at Monday’s low of 193.05 and the 38.6% Fibonacci retracement at 191.75.
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