USD/JPY retreats farther from 4-month tops amid risk-off mood
| • Global risk-off mood underpins JPY’s safe-haven demand and exerts pressure.
• Renewed USD buying/weaker Japanese PMI does little to lend support.
• Focus remains on the latest FOMC monetary policy meeting minutes.
The USD/JPY pair remained under some selling pressure for the second consecutive session and retreated farther from 4-month tops touched earlier this week.
The US President Donald Trump tempered optimism over the progress made in the recent US-China trade talks and expressed pessimism over the upcoming US-North Korea summit in June.
Trump's comments triggered a fresh wave of global risk-aversion trade on Wednesday and underpinned the Japanese Yen's safe-haven demand, which was eventually seen weighing on the major.
Traders even shrugged off a larger-than-expected drop in the Japanese manufacturing PMI, which fell to 52.5 in May as compared to an upwardly revised reading of 53.8 for April, and seemed unaffected by some renewed US Dollar buying interest.
Currently placed near session lows, just below mid-110.00s, investors now look forward to the latest FOMC meeting minutes for some fresh clues over the central bank's near-term monetary policy outlook and fresh directional impetus.
Technical outlook
Omkar Godbole, Analyst and Editor at FXStreet writes: “The probability of a sustained move below 108.65 would rise if the pair finds acceptance below the ascending trendline support and the 5-day MA and 10-day MA roll over in favor of the bears.”
“On the higher side, a weekly close above the 111.40 (long-term falling trendline) would signal a continuation of the rally from the March 26 low of 104.63,” he added further.
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