USD/JPY: Pressured around 104.00 amid upbeat Japan data, market optimism

USD/JPY keeps Friday’s downbeat momentum even as bulls and bears jostle over key catalysts.
Japan’s Q4 Tankan data suggests recovery, Industrial Production for October waited.
Risk-tone remains positive on weekend news concerning Brexit, US stimulus and covid vaccination.

Anil Panchal FXStreet

USD/JPY drops to 103.90, down 0.13% intraday, as markets in Tokyo open for Monday’s trading. In doing so, the risk barometer pays a little heed to the recently improved market sentiment after Japan’s Tankan data for the fourth quarter (Q4) marked upbeat figures.

Tankan Large Manufacturing Index for Q4 recovered from -27 to -10, versus expectations of -15, whereas Non-Manufacturing Index rose from -6 market consensus to -5 during the stated period. Further, Tankan Large Manufacturing Outlook and Non-Manufacturing Outlook also marked upbeat figures of -8 and -6 respectively against -11 and -7 forecasts in that order.

Talking about the risks, the US Food and Drug Administration’s (FDA) official authorization to the Pfizer-BioNTech covid vaccine for emergency use helped the New York Times to mention that the White House staff members will be among the first to be vaccinated. Though, the coronavirus (COVID-19) woes are regaining momentum. Not only the US and Germany, where the activity restrictions are firming up on the back of recently increasing infections and death toll but updates indicating the Japanese government’s consideration to temporarily exclude Tokyo and Nagoya from travel subsidies also probe the risks.

Elsewhere, the European Union (EU) and the UK agreed to give another push to the Brexit talks while extending the negotiations during this week. However, fears of no-deal divorce aren’t off the table as the key hurdles remain unsolved.

Other risk news includes the update, via CNN reported Manu Raju, that the US Congress members are inching closer to the much-awaited covid stimulus while the US allegations on Russia also probed the risk-on mood.

Amid these plays, S&P 500 Futures rise 0.52% whereas Japan’s Nikkei 225 follows the suit by press time.

Looking forward, Japan’s second reading of October Industrial Production, prior -3.2% YoY, will offer immediate direction but the major attention will be given to the risk news.

Technical analysis

Unless breaking the immediate upside hurdle, 21-day SMA level near 104.20, USD/JPY sellers can target a horizontal area including lows marked since November 18, around 103.65/70.

Additional important levels

Overview
Today last price	103.98
Today Daily Change	-0.06
Today Daily Change %	-0.06%
Today daily open	104.04

Trends
Daily SMA20	104.19
Daily SMA50	104.69
Daily SMA100	105.22
Daily SMA200	106.38

Levels
Previous Daily High	104.28
Previous Daily Low	103.82
Previous Weekly High	104.58
Previous Weekly Low	103.82
Previous Monthly High	105.68
Previous Monthly Low	103.18
Daily Fibonacci 38.2%	104
Daily Fibonacci 61.8%	104.11
Daily Pivot Point S1	103.82
Daily Pivot Point S2	103.59
Daily Pivot Point S3	103.36
Daily Pivot Point R1	104.27
Daily Pivot Point R2	104.5
Daily Pivot Point R3	104.73

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.

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