USD/JPY: Stay short into Kato-Bessent meeting – OCBC

FXStreet Insights Team FXStreet

USD/JPY continues to trade with a heavy bias as broad USD softness persists. Pair was last at 140.34 levels, OCBC's FX analysts Frances Cheung and Christopher Wong note.

Bias remains skewed to the downside

"Top trade negotiator Akazawa said there was no discussion on FX during trade talks last week but currency discussion between US Treasury secretary Bessent and Finance Minister Kato may still be possible this week when they meet (likely 23/24 Apr). Hence, some downward pressure on USD/JPY is more likely than not."

"Bear in mind that Minister of Finance Kato had previously said that a weak JPY won’t be tolerated when the nation needs to hold trade talks with the US. Bias remains to stay short for USD/JPY into Kato-Bessent meeting later this week. If the talks lead to nothing conclusive about weakening the USD or strengthening the JPY, there may be risk of USD short covering post-meeting."

"Daily momentum is bearish while RSI fell further into oversold conditions. Bias remains skewed to the downside. Support at 140 and 139.60 levels. Resistance at 141.60, 144.10 levels."

Author

FXStreet Insights Team

FXStreet

The FXStreet Insights Team is a group of journalists that handpicks selected market observations published by renowned experts. The content includes notes by commercial as well as additional insights by internal and external analysts.

EUR/USD holds firm above 1.1900 as US NFP looms

EUR/USD holds its upbeat momentum above 1.1900 in the European trading hours on Wednesday, helped by a broadly weaker US Dollar. Markets could turn cautious later in the day as the delayed US employment report for January will takes center stage.

GBP/USD recovers losses despite rising UK political risks, BoE rate cut bets

Pound Sterling advances against the US Dollar after registering modest losses in the previous session, trading around 1.3650 during the Asian hours on Wednesday. The pair could extend losses as the Pound Sterling faces pressure from rising political risks in the UK and growing expectations of near-term Bank of England rate cuts.

Gold sticks to gains near $5,050 as focus shifts to US NFP

Gold holds moderate gains near the $5,050 level in the European session on Wednesday, reversing a part of the previous day's modest losses amid dovish US Federal Reserve-inspired US Dollar weakness. This, in turn, is seen as a key factor acting as a tailwind for the non-yielding yellow metal ahead of the critical US NFP release.

US Nonfarm Payrolls expected to show modest job gains in January

The United States Bureau of Labor Statistics will release the delayed Nonfarm Payrolls data for January on Wednesday at 13:30 GMT. Investors expect NFP to rise by 70K following the 50K increase recorded in December.

S&P 500 at 7,000 is a valuation test, not a liquidity problem

The rebound from last week’s drawdown never quite shook the sense that it was being supported by borrowed conviction. The S&P 500 once again tested near the 7,000 level (6,986 as the high watermark) and failed, despite a macro backdrop that would normally be interpreted as supportive of risk.

BNB prolonged correction signals deeper bearish momentum

BNB (BNB), formerly known as Binance Coin, is trading below $618 on Wednesday, marking the sixth consecutive day of correction since the weekend. The bearish price action is further supported by rising short bets alongside negative funding rates in the derivatives market.