USD/JPY rallies to 10-week high as Powell’s comments, China data favored risk-on

  • USD/JPY rose to the 10-week high during early Friday.
  • The pair benefited from latest risk-on moves after China’s Caixin manufacturing PMI and comments from the Fed’s Powell.
  • Successful trading above 111.30/40 highlights 112.00 and 112.20 resistances with 110.90 and 110.50 be the following levels to watch past downside break of 111.30. 

USD/JPY is taking bids around 111.80 during early Asian sessions on Friday. The pair is at the ten-week high as upbeat comments from the Fed Chairman Jerome Powell and welcome data concerning China Caixin manufacturing PMI triggered risk-on sentiment. The pair earlier slipped on better than forecast Tokyo Core CPI figure.

At the start of Friday, the Bank of Japan’s (BoJ) preferred version of inflation gauge, Tokyo Consumer Price Index (CPI) ex Fresh Food increased 1.1% in February against 1.0% forecast on a yearly basis. The release helped limit the pair’s gains during initial trading hours.

However, comments from the Fed Chair Powell mentioning that the US economy is in good shape and continued emphasis on patience for the monetary policy helped trigger the pair’s upside. The pair then managed to extend the rise after China’s Caixin Manufacturing purchasing managers’ index (PMI) as the gauge rose to 49.9 in February compared to 48.5 consensus and 48.3 prior.

While recent risk-on fuelled the USD/JPY pair to ten-week high, traders still face uncertain times when it comes to the US-China deal. Also, the release of US ISM Manufacturing PMI may offer intermediate trade opportunities. The February month ISM Manufacturing PMI is expected to soften to 55.5 from 56.6.

USD/JPY Technical Analysis

Given the pair’s successful trading beyond 111.40 resistance, chances of its additional rise to 112.00 and then to the 112.20 can’t be denied. Though, 112.65 and 113.00 may challenge the buyers afterward.

If the pair drops under 100-day simple moving average (SMA) level of 111.40, also slips under 200-day SMA level of 111.30, 110.90 and 110.50 could lure the sellers.

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.

Feed news

Latest Forex News

Editors’ Picks

EUR/USD hovering above 1.1050 amid trade concerns, ahead of ECB minutes

EUR/USD is trading above 1.1050, at familiar levels. Doubts that a US-Sino trade deal may be reached are weighing on markets. The Fed's minutes have reaffirmed the wait-and-see mode, and the ECB's minutes are awaited. 


GBP/USD advances above 1.29 as Conservatives remain in the lead

GBP/USD is rising above 1.29 as fresh opinion polls continue showing a solid lead for Prime Minister Boris Johnson's Conservatives. Further political headlines are awaited.


USD/JPY bounces-off 50-DMA but lacks follow-through

USD/JPY has bounced up from the 50-day MA support of 108.28. China's Vice Premier Liu He is cautiously optimistic about the prospects of the US-China trade deal. Related markets, however, are not buying Liu He's optimism, keeping the recovery in check. 


Gold flirting with session lows, around $1470 region

Gold edged lower through the Asian session on Thursday and is currently placed near the lower end of its daily trading range, around the $1470 region.

Gold News

Hong Kong now a feature in trade negotiations?

The US Senate and House have both passed the Hong Kong Human Rights and Democracy Bill, so now it heads to the desk of US President Trump to either sign or veto it. Sources suggest that the President will sign it into law.

Read more