- USD/JPY bears take a breather around the lowest level in 10 weeks.
- Japan reports second-highest daily infections, teases national emergency.
- US CDC issues temporary moratorium on witnessing higher jump in cases since February.
- US data, covid headlines become the key, stimulus news may also entertain traders.
USD/JPY licks its wounds around 109.00 after testing the lowest level since May 26 the previous day. That said, the Japanese yen (JPY) pair declined during the last two days before recently sluggish performance tracking the US Treasury yields.
It’s worth noting that the escalating Delta covid variant woes in the US and Japan, as well as indecision over the Fed’s next moves and cautious sentiment before the key US data, could be linked as the major catalysts behind the quote latest moves.
The US Centres for Disease Control and Prevention (CDC) issued a temporary moratorium, expiring on October 03, after noting the heaviest jump in infections in February. On the other hand, Japan’s Kyodo News conveyed 12,017 new covid cases, the second-highest on record. It’s worth noting that an anonymous senior health official from Japan was quoted favoring the national emergency after the covid data.
Not only in Japan and the US, the latest virus numbers from China, India and Australia also backed the concerns that the pandemic may slow down economic recovery.
Even so, worries over the Fed’s next moves ahead of the key US Nonfarm Payrolls, not to forget today’s ADP Employment Change and ISM Services PMI, keep the US Dollar Index (DXY) pressured.
That said, the US 10-year Treasury yields stay sidelined near 1.18% whereas the US stock futures and Japan’s Nikkei 225 print mild losses by the press time.
While sour sentiment could weigh on the USD/JPY prices, today’s US data will be crucial as the pair already refrains to refresh the multi-day low of late.
Technical analysis
A clear downside break of an ascending trend line from late April, around 109.40, directs USD/JPY towards a five-month-old horizontal area around 108.35.
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 fluctuates near 1.0700 after US data
EUR/USD stays in a consolidation phase at around 1.0700 in the American session on Wednesday. The data from the US showed a strong increase in Durable Goods Orders, supporting the USD and making it difficult for the pair to gain traction.
USD/JPY refreshes 34-year high, attacks 155.00 as intervention risks loom
USD/JPY is renewing a multi-decade high, closing in on 155.00. Traders turn cautious on heightened risks of Japan's FX intervention. Broad US Dollar rebound aids the upside in the major. US Durable Goods data are next on tap.
Gold stays in consolidation above $2,300
Gold finds it difficult to stage a rebound midweek following Monday's sharp decline but manages to hold above $2,300. The benchmark 10-year US Treasury bond yield stays in the green above 4.6% after US data, not allowing the pair to turn north.
Worldcoin looks set for comeback despite Nvidia’s 22% crash Premium
Worldcoin price is in a better position than last week's and shows signs of a potential comeback. This development occurs amid the sharp decline in the valuation of the popular GPU manufacturer Nvidia.
Three fundamentals for the week: US GDP, BoJ and the Fed's favorite inflation gauge stand out Premium
While it is hard to predict when geopolitical news erupts, the level of tension is lower – allowing for key data to have its say. This week's US figures are set to shape the Federal Reserve's decision next week – and the Bank of Japan may struggle to halt the Yen's deterioration.