The Japanese yen held gains near multi-year highs against U.S. Dollar (CURRENCY:USD) as trading opened in the United States. Traders expect the outlook for Yen to remain positive at least until the Brexit referendum due next week, which will be decisive in setting a trajectory for global currencies.

Yen retreats, but near peak level

Yen jumped steeply during the previous session after Bank of Japan maintained the status quo on interest rates citing a global economic slowdown and Brexit uncertainty as factors behind its decision. During Asian trade, USD/JPY (USDJPY) climbed 0.07% to 104.33.

Meanwhile, the British pound gained momentum after a pro European Union parliament member was shot dead yesterday, sending indications that sentiment might turn in favor of ‘Remain’ campaign in reaction to the tragic murder. GBP/USD (GBPUSD) surged 0.7% to 1.4285 and Euro/USD (EURUSD) gained 0.27% to 1.1255.

Japan may act

Haitong Intl Securities Group’s analyst, Kevin Leung, holds the view that a rally in Asian markets is more of a function of yen trading and a Brexit referendum. He said that markets are speculating that Japanese officials will take action against the yen strengthening. After falling yesterday, Nikkei 225 (INDEXNIKKEI:NI225) closed the day 1.07% higher at 15,599.66 while Hang Seng (INDEXHANGSENG:HSI) was seen advancing by 0.80% to 20,198.68. Even European equities reflected optimism as major indices opened sharply higher, partly uplifted by improved iPath S&P GSCI Crude Oil Total Return (NYSEARCA:OIL) sentiment. CAC 40 ((INDEXEURO:PX1) was trading up by 1.32% to 4,207.73 while DAX (INDEXDB:DAX) gained 1.40% to 9,683 after European leaders approved yet another €7.5bn Greek loan.

Oil prices were trading in positive territory today after sliding down for seven days in a row. Brent Crude pushed higher by 1.46% to $47.88 and West Texas Intermediate Crude oil jumped 1.02% to $46.88. According to oil analysts, upside in oil is temporary as Brexit concerns are more likely to tame the bulls in coming days.