|

USD/JPY remains in red near mid-113s as US stocks falter

  • DXY remains under pressure below the 94 handle.
  • US stocks start the day in the red and extend losses.
  • Falling US T-bond yields weigh on the greenback.

The USD/JPY plummeted to a daily low at 113.30 on during the first half of the NS session on Tuesday before making a modest recovery. As of writing, the pair was trading at 113.53, losing 0.1% on the day.

JPY takes advantage of weak market sentiment

Major equity indexes in the U.S. started the day lower on Tuesday and failed to retrace its losses as falling crude oil prices and a heavy sell-off in GE shares for the second straight day weighed on the energy sector. At the moment, both the Dow Jones Industrial Average and the S&P 500 indexes are losing 0.2%. In the meantime, following yesterday's consolidation, the 10-year US T-bond yield lost traction and was last seen down 0.75% on the day.

The JPY as a traditional safe-haven found demand as the risk appetite remained low on the day. Additionally, a broad-based sell-off seen in the greenback pulled the pair even lower. The US Dollar Index, which had been able to hold above the 94 handle since late October, dropped 93.85 in the session. At the time of writing, the DXY was down 0.5% on the day at 93.90. Today's upbeat PPI data from the U.S. failed to help the index retrace its losses amid some dovish comments from the Fed's Bullard.

In the early trading hours of the Asian session on Wednesday, the GDP growth data from Japan could be the next catalyst for the pair. Markets expect the annual GDP growth to improve to 0.1% from -0.4% on a yearly basis in the third quarter. A higher-than-expected reading should be able to provide an additional boost to the JPY.

Technical outlook

Despite today's retreat, the pair continues to trade in its three-week-old range and struggles to make a decisive move in either direction. The first technical support for the pair could be seen at 113 (psychological level/50-DMA), 112.10 (Oct. 18 low) and 111.45 (100-DMA/200-DMA). On the upside, resistances could be seen at 113.75 (20-DMA), 114.35 (Nov. 7 high) and 114 (psychological level).

Author

Eren Sengezer

As an economist at heart, Eren Sengezer specializes in the assessment of the short-term and long-term impacts of macroeconomic data, central bank policies and political developments on financial assets.

More from Eren Sengezer
Share:

Editor's Picks

EUR/USD retreats below 1.1800 following earlier rebound

EUR/USD loses its recovery momentum and trades little-changed on the day below 1.1300 in the second half of the day on Wednesday. The modest improvement seen in risk mood limits the US Dollar's gains and allows the pair to hold its ground.

GBP/USD clings to small gains above 1.3500

GBP/USD is posting moderate gains above 1.3500 on Wednesday. The pair edges higher as the US Dollar meets fresh supply amid a modest improvement seen in risk sentiment following US President Donald Trump’s first State of the Union address.

Gold rises toward $5,200, supported by geopolitics and trade jitters

Gold buyers are back in the game, eyeing $5,200 and beyonf on Wednesday after seeing a correction from monthly highs on Tuesday. The US Dollar slips after Trump’s SOTU fails to impress and as AI-driven worries ease. Dovish Fed bets also weigh.  Gold looks north so long as the key 61.8% Fibo resistance at $5,142 holds on the daily chart.

Bitcoin, Ethereum and Ripple post cautious recovery amid downside risks

Bitcoin, Ethereum, and Ripple are posting a cautious recovery on Wednesday following a market correction earlier this week.  BTC is approaching a key breakdown level, while ETH and XRP are rebounding from crucial support levels.

Nvidia remains at the heart of the AI boom

Nvidia remains at the heart of the AI boom, with Q4 revenue projected near $65.6–66.1 billion, nearly 70% higher year-over-year. But investors are watching cash flow, leverage, and broader AI adoption. Growth is strong, but the AI stress isn’t over.

Cosmos Hub Price Forecast: ATOM rebounds slightly, bearish outlook remains intact

Cosmos Hub (ATOM) price rebounds, trading above $2.05 at the time of writing on Wednesday, after undergoing a sharp correction since last week. Weakening on-chain and derivatives data support a bearish outlook, while technical analysis remains unfavorable.