USDJPY extends gains above 146.80 amid anxiety ahead of US mid-term elections outcome


  • USDJPY climbs above 146.80 as the traction is returning in the risk-off profile.
  • US yields are advancing after hawkish commentary from Fed policymaker Barkin.
  • Japanese administration is set to approve more stimulus and hike taxes for ultra-wealthy individuals.

The USDJPY pair has given an upside break of the sideways profile in the Tokyo session. Earlier, the asset resurfaced from 146.40 in the early Tokyo session. The risk profile is turning sour as investors are turning cautious ahead of the outcome of the US mid-term elections.

The mighty US dollar index (DXY) has refreshed its day’s high at 110.40 as the risk aversion theme is gaining traction. Mild gains recorded in the S&P500 futures have been eased as the risk appetite is shrinking. The 10-year US Treasury yields have reached 4.23% after hawkish guidance from Richmond Federal Reserve (Fed) President Thomas Barkin.

Fed policymaker has contrary views to the chatters over a slowdown in the pace of rate hikes. Current interest rates are near the proposed one at 4.80% and smaller rate hikes will be witnessed ahead. Fed Barkin believes that the ongoing pace of rate hiking will continue as inflationary pressures have not displayed signs of exhaustion yet.

The outcome of the US mid-term elections seems to favor the Republicans. A note from ANZ Bank states that “We regard a Republican-controlled Congress as the most likely scenario (55%). Not far behind, at 41%, is a split Congress, with a Republican-led House and a Democrat Senate.” An occurrence of the same could bring political instability to the economy.

On the Japanese yen front, Tokyo bulls are facing pressure as Japanese Prime Minister Fumio Kishida is set to approve USD198 billion in the additional budget for the economic stimulus plan, as reported by Bloomberg. The government also “may opt to hike taxes on ultra-wealthy individuals with annual incomes of more than JPY1 billion ($6.8 million).”

USD/JPY

Overview
Today last price 146.74
Today Daily Change 0.15
Today Daily Change % 0.10
Today daily open 146.59
 
Trends
Daily SMA20 147.89
Daily SMA50 145.11
Daily SMA100 140.48
Daily SMA200 132.17
 
Levels
Previous Daily High 147.57
Previous Daily Low 146.08
Previous Weekly High 148.85
Previous Weekly Low 145.67
Previous Monthly High 151.94
Previous Monthly Low 143.53
Daily Fibonacci 38.2% 146.65
Daily Fibonacci 61.8% 147
Daily Pivot Point S1 145.93
Daily Pivot Point S2 145.26
Daily Pivot Point S3 144.44
Daily Pivot Point R1 147.41
Daily Pivot Point R2 148.24
Daily Pivot Point R3 148.9

 

 

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