USD/JPY bears ignore sluggish yields to eye 139.00 as BoJ vs. Fed divergence looses charm


  • USD/JPY bounces off intraday low as bears take a breather amid two-week downtrend.
  • US Treasury yields halt latest downside as debt-ceiling deal pushed for more bond issuance.
  • BoJ officials keep defending easy-money policies but Japan’s upbeat inflation clues lure policy hawks.
  • Receding hawkish Fed bets, absence of major US data and Fed blackout also favor Yen pair sellers.

USD/JPY prints mild losses around 139.35 despite bouncing off an intraday low early Wednesday morning. In doing so, the Yen pair struggles to justify the market’s cautious optimism due to the recent hawkish bias about the Bank of Japan (BoJ), as well as a broad US Dollar weakness.

BoJ Governor Kazuo Ueda signaled on Tuesday that the Japanese central bank will continue QQE until the achievement of the inflation target. Even so, the Yen pair sellers remain hopeful as higher inflation numbers from Japan join easing hawkish Fed bets and mostly downbeat US data.

Earlier in the day, Japan’s Foreign Reserve eased to $1,254.5 billion in May versus $1,265.4 billion.

That said, US Dollar Index (DXY) reverses the previous day’s corrective bounce while taking offers around 104.00, down 0.10% on a day by the press time. In doing so, the greenback’s gauge versus six major currencies suffers from downbeat market bets on the Fed’s next move. That said, the interest rate futures show a nearly 15% probability of a June rate hike. The reason could be linked to downbeat United States activity data released on Monday, as well as the previously dovish comments from the Federal Reserve (Fed) Officials ahead of the pre-Fed blackout.

It’s worth noting that the 10-year coupons remain sluggish at around 3.67%, despite a recent corrective bounce, whereas the two-year counterpart rose a bit to 4.50% at the latest. While portraying the mood, S&P500 Futures print mild gains by tracking Wall Street’s performance.

Looking forward, preliminary readings of April month sentiment data from Japan can entertain the USD/JPY pair traders ahead of Thursday’s Japan first quarter (Q1) Gross Domestic Product (GDP).

Technical analysis

A downside break of a one-month-old ascending support line, now immediate resistance near 139.70, directs USD/JPY bears toward the 137.40-35 support confluence including the previous weekly low and the 21-DMA.

Additional important levels

Overview
Today last price 139.33
Today Daily Change -0.31
Today Daily Change % -0.22%
Today daily open 139.64
 
Trends
Daily SMA20 138.31
Daily SMA50 135.65
Daily SMA100 134.18
Daily SMA200 137.3
 
Levels
Previous Daily High 140
Previous Daily Low 139.1
Previous Weekly High 140.93
Previous Weekly Low 138.43
Previous Monthly High 140.93
Previous Monthly Low 133.5
Daily Fibonacci 38.2% 139.65
Daily Fibonacci 61.8% 139.44
Daily Pivot Point S1 139.16
Daily Pivot Point S2 138.68
Daily Pivot Point S3 138.26
Daily Pivot Point R1 140.06
Daily Pivot Point R2 140.48
Daily Pivot Point R3 140.96

 

 

Share: Feed news

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. The author will not be held responsible for information that is found at the end of links posted on this page.

If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.

FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.

The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.

Recommended content


Recommended content

Editors’ Picks

EUR/USD edges lower toward 1.0700 post-US PCE

EUR/USD edges lower toward 1.0700 post-US PCE

EUR/USD stays under modest bearish pressure but manages to hold above 1.0700 in the American session on Friday. The US Dollar (USD) gathers strength against its rivals after the stronger-than-forecast PCE inflation data, not allowing the pair to gain traction.

EUR/USD News

GBP/USD retreats to 1.2500 on renewed USD strength

GBP/USD retreats to 1.2500 on renewed USD strength

GBP/USD lost its traction and turned negative on the day near 1.2500. Following the stronger-than-expected PCE inflation readings from the US, the USD stays resilient and makes it difficult for the pair to gather recovery momentum.

GBP/USD News

Gold struggles to hold above $2,350 following US inflation

Gold struggles to hold above $2,350 following US inflation

Gold turned south and declined toward $2,340, erasing a large portion of its daily gains, as the USD benefited from PCE inflation data. The benchmark 10-year US yield, however, stays in negative territory and helps XAU/USD limit its losses. 

Gold News

Bitcoin Weekly Forecast: BTC’s next breakout could propel it to $80,000 Premium

Bitcoin Weekly Forecast: BTC’s next breakout could propel it to $80,000

Bitcoin’s recent price consolidation could be nearing its end as technical indicators and on-chain metrics suggest a potential upward breakout. However, this move would not be straightforward and could punish impatient investors. 

Read more

Week ahead – Hawkish risk as Fed and NFP on tap, Eurozone data eyed too

Week ahead – Hawkish risk as Fed and NFP on tap, Eurozone data eyed too

Fed meets on Wednesday as US inflation stays elevated. Will Friday’s jobs report bring relief or more angst for the markets? Eurozone flash GDP and CPI numbers in focus for the Euro.

Read more

Forex MAJORS

Cryptocurrencies

Signatures