USD/JPY: Depressed below 111.00 amid mixed sentiment as Japan holds the fort in Asia
- USD/JPY extends pullback from intraday top, fails to extend Friday’s winning streak.
- Upbeat US employment figures, hopes of President Biden’s $2.25 trillion stimulus fail to please bulls amid Easter Monday holiday.
- S&P 500 Futures, Nikkei 225 offer positive start to the week, US 10-year Treasury yield extend Friday’s weakness.
- Risk catalysts remain as the key but US ISM Services PMI can offer intermediate moves.
USD/JPY drops towards the intraday low of 110.60 as Tokyo opens for Monday’s trading. In doing so, the risk barometer fails to portray the market mood backed by Friday’s welcome US data and the recent optimism over US President Joe Biden’s $2.25 trillion infrastructure spending. However, off in major Asian bourses, namely Australia, New Zealand and China, seem to restrict the quote’s latest moves.
Republicans join the US business lobby and show readiness to conquer Biden’s optimistic infrastructure spending plan due to a tax hike. However, recent comments from the Biden Administration suggest the Democratic Party member’s readiness to use Presidential power to push for the key relief package.
Elsewhere, the US economy has been flashing upbeat readings off-late, which in turn strengthens the global optimism as being the world’s economic leader. On Friday, US Nonfarm Payrolls surged by 916K and the US Bureau of Labor Statistics also revised up the figures for February and January while announcing March’s details.
Also on the risk positive side could be the faster vaccinations and hopes of further stimulus. During the weekend, the ruling Liberal Democratic Party's secretary-general Toshihiro Nikai said in a television program that Japan may need to compile a supplementary budget for the current fiscal year to combat the economic blow from the coronavirus pandemic.
On the contrary, the US-China tussles and the covid woes in Europe, not to forget fears of the virus strain, test the risk-on mood. Also challenging the sentiment could be the US 10-year Treasury yields that seesaw around January 2020 tops.
Amid these plays, S&P 500 Futures rise 0.50% whereas Nikkei 225 prints 0.67% intraday gains by the press time.
Looking forward, risk news will be the key to watch ahead of the US ISM Services PMI for March, expected 58.5 versus 55.3 prior.
Read: US Services Purchasing Managers’ Index March Preview: Expectations are high
Technical analysis
Friday’s bullish spinning top and sustained trading above January 2020 top near 110.30 keeps USD/JPY buyers hopeful.
Author
Anil Panchal
FXStreet
Anil Panchal has nearly 15 years of experience in tracking financial markets. With a keen interest in macroeconomics, Anil aptly tracks global news/updates and stays well-informed about the global financial moves and their implications.
