USD/JPY consolidates the recovery below 110.00 amid mixed markets

USD/JPY is consolidating the recovery below 110.00, as investors turn cautious amid mixed market sentiment and await the Fed Chair Jerome Powell’s speech for fresh trading impetus.

The spot fails to find any comfort from the renewed strength seen in the S&P 500 futures, as widening Japanese Current Account surplus and negative domestic equities underpin the sentiment around the yen. Japan’s Balance of Payment Current Account for February rose by JPY2916.9 billion vs. JPY1996 billion expected.

The pair recovered ground in the US last session, tracking the broad-based rebound in the US dollar, as Wall Street indices saw subdued trading ahead of the earnings seasons while investors digested the FOMC March meeting’s minutes. The rise in the US Treasury yields across the curve also supported the late recovery in the major from near the 109.60 region.

In the day ahead, if the risk-off mood deepens then the US dollar could regain its upside momentum and drive USD/JPY back above 110.00. However, the dollar’s fate hinges on the broader market sentiment and Powell’s comments after the dovish Fed minutes were largely ignored.

Also, of note remains the US Jobless Claims, especially in light of the recent slew of stronger employment and business activity data. Meanwhile, the coronavirus updates also remain in focus, with Tokyo and other areas in Japan considering tighter covid restrictions, per local media reports.

USD/JPY: Technical levels