USD/JPY Current price: 106.83
- Japan Q4 GDP disappointed, backing BOJ's dovish stance.
- US Treasury yields swung within a wide range but end up, preventing the pair from falling further.
The Japanese yen is the overall winner this Wednesday, up against the greenback to its highest since November 2016. The USD/JPY pair fell at the beginning of the day to 106.83, extending its decline afterward to 106.71, following wild swings in US Treasury yields before and after the release of US January inflation data. The 10-year note yield fell as low as 2.80%, and surged to 2.90% in the American session, as equities entered the green, reversing the early three-digit sell-off. At the beginning of the day, Japan released its Q4 GDP, which showed that the economy grew at an annualized rate of 0.5% in the three months to December, well below market's forecast of 0.9%, or the previously revised 2.2%, cooling down hopes of the BOJ's trimming QE sooner than later, backing yen's strength. The country will release Machinery Orders and Industrial Production figures for December during the upcoming Asian session, while the US will offer multiple figures later in the day. In the meantime, the pair retains its bearish bias, as in the 4 hours chart, the pair is further below its 100 and 200 SMAs, both accelerating their declines, while technical indicators consolidate near oversold readings, with no clear directional strength. Renewed selling pressure below 106.80 should open doors for a steeper decline toward the 106.00 region during the upcoming sessions.
Support levels: 106.80 106.50 106.10
Resistance levels: 107.30 107.70 108.00
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.