USD/JPY stays heavy around mid-103.00s despite recent lift to risks

  • USD/JPY directs pullback from 103.60 towards the intraday low.
  • Japan’s Preliminary Industrial Production recovered on YoY, BOJ Summary of Opinions for December meeting favors extension of easy money policy.
  • US President Trump’s teasing of ‘good news’ on stimulus bill recently lifted the mood.
  • Off in major markets, light calendar and holiday season to restrict the moves.

USD/JPY drops to the day’s low of 103.45, down 0.18% intraday, as markets in Tokyo open for Monday’s trading. The pair recently declined after Japan’s industrial production data pleased yen buyers while the US dollar bears the burden of recent risk-on mood.

Preliminary Industrial Production shrank 3.4% YoY versus -10.0% forecast and -3.0% prior. Though, the monthly data disappoints by flashing 0.0% figures compared to 4.0% market consensus and previous readouts.

Further, Bank of Japan’s (BOJ) Summary of Opinions for the December meeting exert additional downside pressure on the USD/JPY prices. The statement suggests that the policymakers are up for further easy money. BOJ must examine extending deadline, possibly expand content, of fund-aid program timing with a compilation of govt's new stimulus package.

It should, however, be noted that the statement suggesting the ”Watching the risk of abrupt moves in the FX market,” indicates the BOJ’s readiness to restrict further strengthening of the Japanese yen (JPY), which in turn should challenge the USD/JPY bears.

On the contrary, market sentiment improved after US President Donald Trump tweeted that he has good news on the coronavirus (COVID-19) aid package. Earlier, US President Trump refrained from signing the much-awaited aid package while demanding the paycheck amount to be increased from $600 to $2,000.

Elsewhere, fears of a jump in the covid cases, as cited by the US Health Official Dr. Anthony Fauci in a CNBC interview, join the upbeat vaccine updates to probe the risks.

Against this backdrop, S&P 500 Futures print 0.15% intraday gains while wavering around the 3,700 threshold.

Looking forward, a lack of major data/events will join the bank holidays in developed economies to offer a silent trading day ahead. Though, updates on the US stimulus, virus and the vaccine will be the key.

Technical analysis

Unless successfully trading below the 10-day SMA level of 103.48, USD/JPY sellers are less likely to recall the monthly low of 102.87 back to the radars.

Additional important levels

Today last price 103.48
Today Daily Change -0.18
Today Daily Change % -0.17%
Today daily open 103.66
Daily SMA20 103.87
Daily SMA50 104.28
Daily SMA100 105.02
Daily SMA200 106.21
Previous Daily High 103.7
Previous Daily Low 103.56
Previous Weekly High 103.89
Previous Weekly Low 103.25
Previous Monthly High 105.68
Previous Monthly Low 103.18
Daily Fibonacci 38.2% 103.61
Daily Fibonacci 61.8% 103.64
Daily Pivot Point S1 103.58
Daily Pivot Point S2 103.5
Daily Pivot Point S3 103.44
Daily Pivot Point R1 103.72
Daily Pivot Point R2 103.78
Daily Pivot Point R3 103.86



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