The safe-haven appeal of the Yen had been rising since the middle of February amidst a surge in populist sentiment across Europe ahead of key national elections. However, investor relief following the first round of the French presidential vote, where centrist candidate Emmanuel Macron emerged victorious, spurred risk appetite, leading to significant outflows from the currency.
Hurting the USDJPY pair was the lift in dollar optimism surrounding a likely tax reform announcement on Wednesday from President Donald Trump. With USDJPY currently sitting below a strong resistance zone around 112.200, failure to break above this critical level could see the Yen resume its medium-term uptrend against the US dollar. The pair was last seen close to 111.500 with the Euro also gaining against the Yen, trending near 121.800 after already rallying more than 4.00% for the week.