USD/JPY fades the recent advance and retreats below 132.00 ahead of Powell
|- USD/JPY comes under pressure following Monday’s top near 133.00.
- US yields trade on a mixed tone ahead of Powell.
- Fed’s Powell will speak later in the NA session.
USD/JPY comes under some moderate downside pressure and probes the area below the 132.00 yardstick on turnaround Tuesday.
USD/JPY now focuses on Powell
The upside momentum in USD/JPY run out of steam in the boundaries of the 133.00 neighbourhood at the beginning of the week, as the NFP-induced bounce appear to have lost some impulse.
Tuesday’s resurgence of the selling pressure in spot comes amidst the pick-up in the risk-off sentiment, which eventually lends support to the demand for the Japanese safe haven.
Additionally, the mixed performance in US yields see the short end of the curve giving away part of the recent strong advance vs. extra gains in the belly and the long end. In the Japanese debt market, the JGB yields drop marginally below the 0.50% level.
Data wise in Japan, Household Spending dropped 1.3% in the year to December, while advanced prints for the same month saw the Coincident Index and the Leading Economic Index at 98.9 and 97.2, respectively.
Later in the NA session, Chief Powell will participate in a discussion at the Economic Club of Washington.
USD/JPY levels to consider
As of writing the pair is retreating 0.50% at 131.95 and the break below 128.08 (monthly low February 2) would aim for 127.21 (2023 low January 16) and finally to 126.36 (monthly low May 24 2022). On the upside, the immediate hurdle comes at 132.90 (monthly high February 6) seconded by 134.77 (2023 high January 6) and then 136.78 (200-day SMA).
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers.