- USD/JPY elevated on positive trade tones and clarification from Beijing that trade talks are on track.
- USD/JPY will now depend on the outcome of the highly anticipated US Nonfarm Payrolls data.
Steady below the 200-day moving average, USD/JPY fell from 108.97 to 108.66 overnight as positive trade deal headlines flowed through the news wires and helped US stocks eke out further gains. Risk appetite was solid into the close on Wall Street overnight while trade talks dominated the market's theme. Investors had been taking on a series of positive news over this week from the US side, although, without confirmation from Beijing, markets were apprehensive to rely on such optimism.
Trade-deal news supports a risk-on tone
However, a Wall Street Journal article stated that while China and the US remain at odds over the value of farm goods Beijing will buy, an official statement from Beijing had confirmed that China’s trade negotiations with the US remain on track.
China’s Commerce Ministry said Thursday that the negotiating teams from both sides have maintained close communication, though it didn’t provide details on progress. The recent strain had spooked investors and stoked concerns over the global economic outlook,
the article leads.
Prior to the news, there had been additional upbeat tones from Washington US President Donald Trump who said that the US is having meetings and discussions with China, describing the meetings as ‘going well’ and said that "something could happen regarding 15th Dec tariffs, but we are ‘not discussing that yet’.
Consequently, the S&P index rose 4.94 points or 0.16% at 3117.69, the NASDAQ index rose 4.031 points or 0.05% at 8570.70 and the Dow industrial average rose 29.36 points or 0.11% at 27679.14, below the 27745.2 and up from a low of 27562.80.
As for US yields, the 2-year treasury yields rose slightly from 1.56% to 1.60%, 10-year yields rose from 1.76 to 1.82%. "Markets are pricing a near-zero chance of easing at the Fed’s 11 Dec meeting but a terminal rate of 1.25% (vs Fed’s mid-rate at 1.63% currently)," analysts at Westpac explained.
Meanwhile, looking ahead, the key event will come from the US session in the form of Nonfarm Payrolls. The event is always a climax to the first week of each month, however, today's will garner particular focus considering the latest manufacturing disappointments. "Nov Nonfarm Payrolls are expected rise 185k and see the unemployment rate hold at 3.6%. Average hourly earnings are anticipated to hold at 3.0%year, still down from the 3.2%year pace seen in August," analysts at Westpac explained.
USD/JPY levels
Meanwhile, from a technical perspective, Valeria Bednarik, the chief analyst at FXStreet explained that the, "USD/JPY pair has retreated from a congestion of moving averages, which favor a downward extension, as the 20 SMA is crossing below directionless larger ones. Technical indicators have spent the day seesawing in negative territory, the Momentum now marginally higher, although the RSI flat at around 41. The pair has an immediate resistance at 109.00, but it would need to rally beyond 109.30 to recover a bullish stance."
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 trades weak below 1.0800 amid Good Friday lull, ahead of US PCE
EUR/USD remains depressed below 1.0800 after soft French inflation data, amid minimal volatility and thin liquidity on Good Friday. The pair keenly awaits the US PCE inflation data and Fed Chair Powell's speech for fresh hints on next week's price action.
GBP/USD holds steady above 1.2600 as markets stay calm on Good Friday
GBP/USD trades sideways above 1.2600 amid a typical Good Friday trading lull. A broadly firmer US Dollar could keep any upside attempts limited in the pair ahead of the US PCE inflation data and Fed Chair Powell's appearance.
Gold price sits at all-time highs above $2,230, US PCE eyed
Gold price hit all-time highs at $2,236 on Thursday to finish Q1 2024 with a bang. Most major world markets, including the US are closed due to Holy Friday, leaving volatility around Gold price highly subdued. US PCE inflation and Powell are awaited.
Jito price could hit $6 as JTO coils up inside this bullish pattern
Jito (JTO) price has been on an uptrend since forming a local bottom in early January. Since then, JTO has revisited the key swing point formed in early December, suggesting the bulls’ intention to move higher.
Key events in developed markets next week
Next week, the main focus will be inflation and the labour market in the Eurozone. We expect services inflation to be impacted by the easter effect, while the unemployment rate to be unchanged.