The Japanese yen is soaring

Bank of Japan governor Haruhiko Kuroda listens to a question during a press conference in Tokyo. Photo: Behrouz Mehri/AFP/Getty Images

The Japanese yen is flying in Asia, hitting the highest level against the greenback since November 2016.

The USD/JPY currently trades at 107.13, down 0.64% for the session, extending its slide from early January to 5.5%.

USD/JPY Daily Chart

“The general point to make about the dollar is that there is now more focus on the ‘twin deficits’ implications of US tax reform rather than the potential short term growth/Fed policy implications,” says Ray Attrill, Head of FX Strategy at the National Australia Bank.

“Rising twin deficits historically go hand in hand with a falling US dollar.”

Reflecting that view, other major currencies are also pushing higher against the greenback in Asia, led by the New Zealand dollar which has gained over 0.5% on the back of a lift in New Zealand inflation expectations.

The euro, Canadian and Australian dollars have also strengthened by 0.2%.

For the moment, traders do not appear to be concerned about the looming release of US CPI data for January later in the session.

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