USD/JPY analysis: steady near multi-year lows
|USD/JPY Current price: 106.80
- Japanese FM Aso comments fueled yen's gains at the beginning of the day.
- US Treasury yields swung all day long, providing little clues to USD/JPY traders.
The USD/JPY pair entered positive territory in the US session, following the release of generally positive US employment and manufacturing data, but not before reaching a fresh multi-month low of 106.17 during the Asian session. The pair fell on the back of comments from Japanese Finance Minister Taro Aso, who said that the current yen strength "doesn’t warrant special intervention," showing no concerns about the ongoing yen's strength. Japanese Machinery Orders unexpectedly fell in December by 11.9%, against a 2.3% backdrop expected, the largest monthly decline since 2014. Industrial Production in the same month rose 2.9%, surpassing expectations of 2.7%. The pair followed the lead of yields in the US afternoon, recovering alongside with them but yields swung wildly all through the day, with the 10-year note yield between 2.87% and 2.94%, a fresh 4 year high, somehow interrupting the usual correlations. The pair is bearish, particularly as it is unable to recover above the 107.00 level. In the 4 hours chart, the pair continues developing well below its 100 and 200 SMAs, while technical indicators bounced from oversold readings, but remain well below their mid-lines. The pair needs to clearly break this 106.80 region to be able to extend its gains up to the 107.55 area first, en route to 107.90.
Support levels: 106.50 106.15 105.70
Resistance levels: 107.10 107.55 107.90
View Live Chart for the USD/JPY
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