- USD/JPY recovers from five days’ low.
- The US-led challenges to global trade system stay, US President Donald Trump attacks the Fed.
- Trade/political headlines will be in focus.
USD/JPY pulls back from the five days’ low while taking rounds to 109.00 amid the initial Asian trading session on Tuesday.
The quote registered the highest losses in a month’s time on Monday after headlines from the United States (US) flashed challenges to the global trading system. Also contributing to the pair’s declines were downbeat data from the US.
Be it the US-China phase-one stalemate or steel tariffs on South American economies, not to forget likely trade negative measures against the European Union (EU), the US ran the show of trade protectionism on Monday. Further, the US ISM manufacturing numbers stayed in the contraction territory for the fourth consecutive month and raised doubts on the strength of the world’s largest economy.
With this, the market’s risk aversion hit Wall Street on the first trading day of the month whereas the US 10-year Treasury yields recovered four basis points to 1.82%. However, the latest quotes seem to change with the S&P 500 Futures be mildly on the positive side with the US government bonds waiting for fresh directions.
Fed under attack…
The US President Donald Trump maintains his dislike for the US Federal Reserve’s (Fed) monetary policy as he recently said “the Fed should lower rates (there is almost no inflation) and loosen, making us competitive with other nations, and manufacturing will SOAR! The dollar is very strong relative to others.” While the Fed policymakers are on the blackout session, downbeat data from the US keep diming odds of any monetary policy stabilization amid contrasting comments from the US President Trump.
Additionally, a rehash of the November news that the Japan government is considering 25 Trillion Japanese yen (JPY) economic stimulus package, as per the NHK, recently crossed the wires while helping the pair.
Moving on, a lack of major data will keep the market’s attention on the trade/political headlines.
Technical Analysis
The quote stays shy of visiting 110.00 and can drop back to mid-November lows near 108.20 on the break of 21-day Simple Moving Average (SMA) level of 108.95.
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
Editors’ Picks
EUR/USD hovers around 1.0700 ahead of German IFO survey
EUR/USD is consolidating recovery gains at around 1.0700 in the European morning on Wednesday. The pair stays afloat amid strong Eurozone business activity data against cooling US manufacturing and services sectors. Germany's IFO survey is next in focus.
USD/JPY refreshes 34-year high, attacks 155.00 as intervention risks loom
USD/JPY is renewing a multi-decade high, closing in on 155.00. Traders turn cautious on heightened risks of Japan's FX intervention. Broad US Dollar rebound aids the upside in the major. US Durable Goods data are next on tap.
Gold: Defending $2,318 support is critical for XAU/USD
Gold price is nursing losses while holding above $2,300 early Wednesday, stalling its two-day decline, as traders look forward to the mid-tier US economic data for fresh cues on the US Federal Reserve interest rates outlook.
Worldcoin looks set for comeback despite Nvidia’s 22% crash Premium
Worldcoin (WLD) price is in a better position than last week's and shows signs of a potential comeback. This development occurs amid the sharp decline in the valuation of the popular GPU manufacturer Nvidia.
Three fundamentals for the week: US GDP, BoJ and the Fed's favorite inflation gauge stand out Premium
While it is hard to predict when geopolitical news erupts, the level of tension is lower – allowing for key data to have its say. This week's US figures are set to shape the Federal Reserve's decision next week – and the Bank of Japan may struggle to halt the Yen's deterioration.