USD/JPY: Pops on 112 handle for fresh high at 112.16

Overnight, USD/JPY was little changed around 112 in a risk-on environment but has struggled with tough resistance much through 112 the figure. Stock markets drove back the yen as rates rose. The US 10yr treasury yield climbed from 2.55% to 2.59% which was a one-month high while the 2yr yield rose from 2.39% to 2.41%. We saw slight gains in benchmarks on Wall Street with an advance in the financial sector although gains were capped by weaker health-care providers:

• The Dow Jones Industrial Average (DJIA), +0.26% added 68 points, or 0.3%, at 26,452.45.
• The S&P 500 index eeked out a very modest 0.1% to 2,907.
• The Nasdaq Composite Index added 24.21 points, or 0.3%, to 8,000.23.

The next risk event will come in China’s March industrial production, retail sales, and Q1 GDP report.

" Headline GDP growth was 6.4%yr in Q4 18, with a median forecast of 6.3% in Q1. There seems to be little danger of a notable surprise on GDP, given that annual growth has printed no further than 0.1ppt from the Bloomberg median forecast every quarter since Q2 2015. Although consensus is already looking for a mild uptick in production (5.9%yr) and sales growth (8.4%yr), consensus expectation at this juncture is better seen as a combination of hope and forecasts," analysts at Westpac explaind.

USD/JPY levels

Valeria Bednarik, The Chief Analyst at FXStreet, explained that Tthe consolidative phase continues:

"The 4 hours chart shows that, despite having lost upward momentum, the downside potential remains limited, as a bullish 20 SMA continues attracting buyers on intraday declines. The RSI indicator in the mentioned chart hovers around 62, while the Momentum has extended its decline down to the 100 level where it turned flat, this last, rather reflecting the absence of progress than suggesting an upcoming decline."