USD/JPY: Sellers dominate near 4-day low after BOJ

USD/JPY remains on the back foot even if BOJ announces no monetary policy change.
US Fed failed to avoid bears, risk-tone stays under pressure.
Kuroda’s speech, Friday’s US NFP, and trade/Brexit headlines in the spotlight for now.

Anil Panchal FXStreet

Even with the BOJ refraining from any policy change, USD/JPY seesaws near multi-day low, around 108.65, during early Thursday.

The BOJ met wide market expectations while holding short-term interest rate target at -0.10% with a 10-year Japanese Government Bond (JGB) yield target around zero. However, the Japanese central bank offered more clarity on its forward guidance via the third quarter (Q3) Outlook Report even if it said that the economy likely to grow below potential temporarily and short/long term rates to stay at current/lower levels.

In spite of the US Federal Reserve (Fed) Chairman’s broadly upbeat claims, traders concentrated more on the United States’ (US) central bank’s third consecutive rate cut and downbeat expectations for inflation. The same triggered broad US Dollar (USD) weakness on late-Wednesday while carrying the same off-late.

Market’s risk sentiment has been sluggish off-late as uncertainty surrounding the US-China trade deal, mainly due to no fixed venue, joins the US Secretary of State Mike Pompeo's comments stating that China’s ruling Communist Party (CCP) took advantage of the US goodwill. Traders seem to ignore the recent favors from the US-side to China, permission to renew Iran sanction waivers being the latest, as well as receding Brexit uncertainty.

Given the already released Bank of Japan (BOJ) monetary policy decision and a quarterly Outlook Report, investors will now gear up for what the Governor Haruhiko Kuroda wants to say about the central bank’s forecasts.

Following that, markets will prepare for Friday’s headline employment data from the US, with a focus on the Nonfarm Payrolls (NFP), while trade/Brexit headlines and second-tier statistics on the economic calendar will keep entertaining momentum traders.

Technical Analysis

Unless providing a daily closing beyond 200-day Simple Moving Average (SMA), at 109.05 now, and a three-month-old rising trend-line, at near 109.35, prices are less likely to aim for 110.00. As a result, sellers remain hopeful for September month high close to 108.50 and 21-day SMA level near 108.25.

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.

EUR/USD holds above 1.1750 after mixed EU PMI data

EUR/USD manages to hold above 1.1750 but struggles to gather recovery momentum on Friday, following the mixed February PMI figures from Germany and the Eurozone. In the second half of the day, Q4 GDP, December inflation and February PMI data from the US will be watched closely by market participants.

GBP/USD recovers further toward 1.3500 after UK PMI data

GBP/USD is recovering ground further toward 1.3500 in European trading on Friday, helped by a modest uptick in the Pound Sterling after stronger-than-expected UK January Retail Sales and February PMI data. However, the pair's further upside could be limited amid persistent US Dollar strength as the focus turns to key US data.

Gold sticks to positive bias above $5,000 ahead of US data

Gold gains some positive traction for the third consecutive day on Friday. holding above $5,000. Traders now look forward to the key US macro releases – the Advance Q4 GDP report and the Personal Consumption Expenditures (PCE) Price Index – for fresh trading impetus.

US GDP growth expected to slow down significantly in Q4 after stellar Q3

The United States Bureau of Economic Analysis will publish the first preliminary estimate of the fourth-quarter Gross Domestic Product at 13:30 GMT. Analysts forecast the US economy to have expanded at a 3% annualized rate, slowing down from the 4.4% growth posted in the previous quarter.

Iran tensions and AI fears at the forefront ahead of key US data

Thursday’s scorecard shows major US Stock benchmarks closed modestly in the red amid mounting US-Iran tensions and AI disruption worries. The S&P 500 shed 19 points (0.3%) to 6,861, the Nasdaq 100 lost 101 points (0.4%) to 24,797, and the Dow Jones Industrial Average dropped 267 points (0.5%) to 49,395.

Official Trump price approaches breakout with mixed signals from traders

Official Trump (TRUMP) is trading at $3.50 at the time of writing, approaching its upper consolidation range. A breakout from this range could open the door for an upside move. On-chain data shows market indecision, with balanced flows between bulls and bears, signaling a lack of clear directional bias.