- USD/JPY sellers attack intraday low amid fears of the virus-led activity restrictions in Japan.
- Tokyo and 3 surrounding prefectures can witness emergency as early as this week.
- Japan’s Jibun Bank Manufacturing PMI overcomes manufacturing contraction for the first time since early 2019.
- S&P 500 Futures drop 0.15%, Nikkei 225 down over 1.0% amid cautious sentiment.
USD/JPY bounces off intraday low to 103.07, down 0.18% on a day, amid the initial hour of Tokyo open on Monday. The yen pair recently slumped after chatters over the worsening coronavirus (COVID-19) conditions in Japan leading towards emergencies. Also weighing on the pair could be the multi-month high of Jibun Bank Manufacturing PMI and the US dollar weakness.
Early in Asia, Japan’s Kyodo News came out with the headlines suggesting the government’s rush to experts while asking whether to declare a state of emergency in Tokyo and neighboring prefectures hit by surging coronavirus cases. “Japan is struggling to curb coronavirus infections with more than 3,100 new cases confirmed on Sunday. Tokyo reported 816 new infections, bringing the cumulative total to 62,590, by far the largest among the country's 47 prefectures,” said the news further.
Also weighing on the risks could be Reuters’ headline, quoting China’s securities regulator, while saying, New York Stock Exchange (NYSE) plans to delist three Chinese telecom firms are “political” and that the impact will be “limited”. It’s worth mentioning that the overcoming of Brexit and US covid aid package hurdles can renew the US-China tussle story for risk-watchers.
Furthermore, upbeat prints by Japan’s Jibun Bank Manufacturing PMI for December also favored USD/JPY sellers. The second reading of the Asian major’s manufacturing gauge not only crossed the initial forecast of 49.7 but marked the expansionary figure of 50.00 for the first time in almost two years.
Against this backdrop, S&P 500 Futures step back from the record top around the mid-3,700s while Japan’s Nikkei 225 drop 1.22% by press time.
Moving on, risk catalysts will be the key while second reading of the monthly activity data will also be important to watch.
Technical analysis
Although USD/JPY buyers are less likely to return unless witnessing an upside break of an eight-week-old falling trend line, at 103.70 now, the multi-month low flashed in December around 102.87 can restrict the quote’s immediate declines.
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 retreats toward 1.0850 on modest USD recovery
EUR/USD stays under modest bearish pressure and trades in negative territory at around 1.0850 after closing modestly lower on Thursday. In the absence of macroeconomic data releases, investors will continue to pay close attention to comments from Federal Reserve officials.
GBP/USD holds above 1.2650 following earlier decline
GBP/USD edges higher after falling to a daily low below 1.2650 in the European session on Friday. The US Dollar holds its ground following the selloff seen after April inflation data and makes it difficult for the pair to extend its rebound. Fed policymakers are scheduled to speak later in the day.
Gold climbs to multi-week highs above $2,400
Gold gathered bullish momentum and touched its highest level in nearly a month above $2,400. Although the benchmark 10-year US yield holds steady at around 4.4%, the cautious market stance supports XAU/USD heading into the weekend.
Chainlink social dominance hits six-month peak as LINK extends gains
-637336005550289133_XtraSmall.jpg)
Chainlink (LINK) social dominance increased sharply on Friday, exceeding levels seen in the past six months, along with the token’s price rally that started on Wednesday.
Week ahead: Flash PMIs, UK and Japan CPIs in focus – RBNZ to hold rates
After cool US CPI, attention shifts to UK and Japanese inflation. Flash PMIs will be watched too amid signs of a rebound in Europe. Fed to stay in the spotlight as plethora of speakers, minutes on tap.