Should investors be wary of the CAD/JPY’s upside potential as it approaches last year’s highs, despite showing no correlation with USD selling?

Should investors be wary of the CAD/JPY’s upside potential as it approaches last year’s highs, despite showing no correlation with USD selling?

22.01.2024

Last weekend, the Canadian dollar extended its gains against the yen for the fifth consecutive day, despite the fact that Canada’s November retail sales figures, released on Friday the 19th, deteriorated from 0.7% in the previous month to -0.2%.Amid a market trend favoring selling the yen and the U.S. dollar, the CAD/JPY pair rose from 109.712 to 110.326, significantly surpassing this year’s high. Since the pair is now just a hair’s breadth away from last year’s high of 111.091, investors should remain cautious about a potential rally to new highs following a correction.

European currencies saw the pound fall against the yen after the UK’s December retail sales figures, released last weekend, showed a year-on-year decline of 2.4%—a deterioration from the previous month’s 0.1% growth—and the year-on-year figure excluding automotive fuel also fell short of the previous month’s result. The GBP/JPY pair dropped by approximately 2.5 yen, from 188.920 to 187.412.The decline halted as the pair found support at the 20-period moving average on the 4-hour chart. However, since the RSI on the daily chart is showing divergence, caution is advised regarding further declines.

Today, China’s prime lending rate will be released at 10:15, Malaysia’s Consumer Price Index at 13:00, Taiwan’s unemployment rate at 17:00,at 5:30 PM Hong Kong’s Consumer Price Index, at 6:00 PM the Philippines’ Retail Sales and Industrial Production, at 8:00 PM Israel’s Manufacturing Production, at 11:30 PM Turkey’s Central Government Debt, at 12:00 AM the U.S. Leading Economic Index, at 1:30 AM the U.S. 6-month Treasury bill auction, and at 3:00 AM South Korea’s Producer Price Index growth rate.We should remain cautious about the upside potential of the CAD/JPY pair, which is approaching last year’s highs despite the lack of correlation with USD selling.

Past Market Reports

1. 17.04.2026New

   Will the market wait and see how much further the U.S. dollar can rise against the yen?

2. 16.04.2026New

   Will the weakening Swiss franc recover? Attention is turning to price movements during European trading hours.

3. 15.04.2026New

   Market participants are likely keeping a close eye on the upside potential of the euro, which has risen against the U.S. dollar

4. 14.04.2026New

   Should we keep an eye on remarks by key figures in the U.S. and try to gauge the direction of currency strength?

5. 13.04.2026New

   Market participants are likely watching for signs of a rebound in the Canadian dollar, which fell against the U.S. dollar following the release of employment figures

6. 10.04.2026

   Will the weakening Swiss franc continue to strengthen against the yen, or should we wait and see?

7. 09.04.2026

   Will the U.S. dollar, which has fallen against the yen, continue its downward slide, or should we wait and see how the market moves?

8. 08.04.2026

   Should we keep an eye on the upside for European currencies that have risen against the U.S. dollar?

9. 07.04.2026

   Market participants may be wary of further downside potential for the U.S. dollar, which has weakened amid concerns over the situation in Iran

10. 06.04.2026

    Investors should be wary of sudden spikes in volatility while major markets are closed