- USD/JPY drops for the fifth day after stepping back from 105.67 during last week.
- Tokyo to increase alert level to the highest amid recent surge in covid infections.
- BOJ’s Kuroda signals further support for regional banks, FinMin also hints economic helps.
- The Japanese trade surplus rose in October, US housing data, risk news in the spotlight.
USD/JPY prints 0.10% intraday losses while nearing the intraday low of 104.03 during the early Wednesday. In doing so, the yen pair drops the lowest since November 09 as the coronavirus (COVID-19) firms up grip in Tokyo. It’s worth mentioning that the upbeat trade numbers and Japanese policymakers’ readiness to battle the pandemic also favor the sellers off-late.
Covid fears extend beyond the West…
Not only the US and European economies but Japan has also been witnessing negative impacts of the COVID-19 resurgence. Chief Cabinet Secretary Kato Katsunobu recently announced readiness to unveil the highest alert while citing “the recent nationwide surge in coronavirus infections” as the reason behind the move.
As per the latest covid update from the Kyodo News, Tokyo marked an increase of over 50 cases, from 34,888 to 34,931, as of 10:40 PM November 16, 2020 (Japan time).
Elsewhere, the BOJ Governor Haruhiko Kuroda announced measures for the regional bank that stay out of the monetary policy’s reach. While also helping the regional banks to combat the pandemic, Japan’s Finance Minister (FinMin) Taro Aso offered subsidies as an option.
It’s worth mentioning that the uncertainty over the US stimulus package also weighs on the risks. That said, Nikkei 225 drops over 0.75% whereas S&P 500 Futures print 0.23% intraday losses by press time.
Talking about the data, Japan’s Merchandise Trade Balance Total for October grew past ¥250 B forecast to ¥872.9 B. Details suggest that the Imports dropped below -9% forecast whereas the Exports recovered from -4.5% market consensus to -0.2% on YoY basis.
Given the lack of major data ahead of the US session, USD/JPY traders will keep their eyes on the risk catalyst for fresh impulse. During the North American session, the second-tier housing data may offer intermediate moves to the pair.
Technical analysis
September low near 104.00 precedes the November 06 high of 103.75 to restrict the near-term downside of USD/JPY.
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 consolidates recovery gains above 1.0650
EUR/USD stays in a consolidation phase following Wednesday's rebound and trades in a narrow range above 1.0650. The improving risk mood doesn't allow the US Dollar to gather strength as markets await mid-tier data releases.
GBP/USD clings to moderate gains above 1.2450
GBP/USD is clinging to recovery gains above 1.2450 in European trading on Thursday. The pair stays supported by a sustained US Dollar weakness alongside retreating US Treasury bond yields. Fed policymakers will speak later in the day.
Gold shines amid fears of fresh escalation in Middle East tensions
Gold trades in positive territory near $2,380 on Thursday after posting losses on Wednesday. The precious metal holds gains amid fears over tensions in the Middle East further escalating, with Israel responding to Iran's attack over the weekend.
Ripple faces significant correction as former SEC litigator says lawsuit could make it to Supreme Court
Ripple (XRP) price hovers below the key $0.50 level on Thursday after failing at another attempt to break and close above the resistance for the fourth day in a row.
Have we seen the extent of the Fed rate repricing?
Markets have been mostly consolidating recent moves into Thursday. We’ve seen some profit taking on Dollar longs and renewed demand for US equities into the dip. Whether or not this holds up is a completely different story.