USD/JPY: Three-day downtrend tests 109.00 as Japan aims to extend virus-led emergency

  • USD/JPY bounces off intraday low, drops for the third consecutive day.
  • Japan government looks set to extend and expand the state of emergency on Friday.
  • Risk dwindles as pre-NFP caution joins virus woes to battle vaccine hopes, receding reflation fears.

Despite recently bouncing off intraday low, USD/JPY stays pressured around 109.00 as markets in Tokyo opens for Friday’s trading. In doing so, the yen pair justifies the coronavirus (COVID-19) fears at home as well as the typical pre-NFP trading lull.

As per Kyodo News, “The Japanese government is set Friday to expand the ongoing COVID-19 state of emergency beyond Tokyo and the Osaka region and extend it to the end of May in a bid to bring down infection cases and ease the strain on hospitals.” The report also mentions Japan’s 4,375 new infections on Thursday as down 27% versus the fourth wave peak marked last Saturday.

It should be noted that the US and European Union’s (EU) support to waive IP protections to the covid vaccines join the Fed policymakers’ rejections of reflation fears and tapering talks, except for Dallas Fed President Robert Kaplan, to test pessimism. Also on the risk positive side could be the recently upbeat US data flashing early signals for today’s US employment figures.

Read: US Nonfarm Payrolls April Preview: When the economy booms, it's all about rates

Amid these plays, Japan’s Nikkei 225 drops 0.11% while S&P 500 Futures and US 10-year Treasury yields stay sluggish ahead of the key US data.

Looking forward, Japanese Prime Minister Yoshihide Suga’s emergency announcement, around 10:00 GMT, will be the key but not more important than the US jobs report for April.

Technical analysis

A bearish crossover of 21-day SMA and 50-day SMA suggests further downside of the USD/JPY prices towards 108.35-30 support-zone ahead of directing bears to April’s low near 107.50. Meanwhile, buyers will not risk entries until witnessing a clear break of 109.80.

Additional important levels

Today last price 109.02
Today Daily Change -0.07
Today Daily Change % -0.06%
Today daily open 109.09
Daily SMA20 108.76
Daily SMA50 108.86
Daily SMA100 106.57
Daily SMA200 105.86
Previous Daily High 109.43
Previous Daily Low 109
Previous Weekly High 109.37
Previous Weekly Low 107.64
Previous Monthly High 110.85
Previous Monthly Low 107.48
Daily Fibonacci 38.2% 109.16
Daily Fibonacci 61.8% 109.27
Daily Pivot Point S1 108.92
Daily Pivot Point S2 108.75
Daily Pivot Point S3 108.49
Daily Pivot Point R1 109.34
Daily Pivot Point R2 109.6
Daily Pivot Point R3 109.77



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