- USD/JPY is currently trading at 109.69 between a range of 109.47 and 109.71 on the bid.
- Risk off markets overnight kicked into early Asia, but yen on backfoot in Tokyo.
- USD/JPY is correcting 23.6% of Wall Street's slide.
USD/JPY has managed to climb about 23.6% of Wall Street's slide in the last Asian trading session this week with USD/JPY currently trading at 109.69 at the time of writing, moving up between a range of 109.47 and 109.71 on the bid.
Asia equity markets on the back foot - Nikkei 225 (-1.0%)
Markets overnight were risk-off following deepening sentiment for a prolonged trade spat between the US and China as U.S. and Chinese officials exchanged insults over Huawei and trade in general. The mood sent the yen higher, rallying across the board and up from 110.60's to over a big figure higher to the 109.40s vs the greenback.
Risk off sends US yields lower aiding yen's rise
"The US 10yr treasury yield fell from 2.38% to 2.29% (the lowest since Oct 2017), steadying at 2.32%. The 2yr T-note yield slipped from 2.21% to 2.12% then to 2.14%. The chance of a Fed rate cut by December, implied by Fed fund futures, rose from 100% to 130%,"
analysts at Westpac explained.
Japanese CPI
- Japan National CPI (Y/Y) Apr: 0.9% (est 0.9%, prev 0.5%) -
- Japan National CPI Ex Fresh Food (Y/Y): 0.9% (est 0.9%, prev 0.8%) -
- Japan National CPI Ex Fresh Food, Energy (Y/Y): 0.6% (est 0.6%, prev 0.4%)
As for U.S. data, that too weighed on the greenback and the USD/JPY pair. Firstly, the Manufacturing PMI fell 2 points to 50.6 which was the lowest level since 2009 while US Services PMI fell 2.1pts to 50.9, a three-year low. US new home sales lost -6.9% in April while US jobless claims offered some solace for the greenback, coming at 211k last week.
USD/JPY levels
Valeria Bednarik, the Chief Analyst at FXStreet, explained that the USD/JPY pair trades a couple of pips above the daily low ahead of the Asian opening, having declined below the 61.8% retracement of the latest bullish run measured between 109.01 and the 110.66 high at 109.65, the immediate resistance.
In the 4 hours chart, the price is far below its 20 and 100 SMA, both converging around 110.20, the Momentum indicator maintaining a strong bearish slope and the RSI trying to stabilize around 34, all of which keeps the risk skewed to the downside for the upcoming sessions.
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 holds below 1.0750 ahead of key US data
EUR/USD trades in a tight range below 1.0750 in the European session on Friday. The US Dollar struggles to gather strength ahead of key PCE Price Index data, the Fed's preferred gauge of inflation, and helps the pair hold its ground.
USD/JPY stays firm above 156.00 after BoJ Governor Ueda's comments
USD/JPY stays firm above 156.00 after surging above this level on the Bank of Japan's decision to leave the policy settings unchanged. BoJ Governor said weak Yen was not impacting prices but added that they will watch FX developments closely.
Gold price oscillates in a range as the focus remains glued to the US PCE Price Index
Gold price struggles to attract any meaningful buyers amid the emergence of fresh USD buying. Bets that the Fed will keep rates higher for longer amid sticky inflation help revive the USD demand.
Bitcoin Weekly Forecast: BTC’s next breakout could propel it to $80,000 Premium
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.
US core PCE inflation set to signal firm price pressures as markets delay Federal Reserve rate cut bets
The core PCE Price Index, which excludes volatile food and energy prices, is seen as the more influential measure of inflation in terms of Fed positioning. The index is forecast to rise 0.3% on a monthly basis in March, matching February’s increase.