- USD/JPY picks up bids to refresh intraday high, reversing the previous day’s losses.
- Recession fears, hawkish central banks renew upside momentum of Treasury bond yields.
- Japan considers aid package to ease utility bill burden amid rising energy cost.
- US GDP could entertain buyers but BOJ’s intervention tests upside momentum.
USD/JPY remains on the front foot around 144.65, refreshing intraday high while paring the previous day’s losses ahead of Thursday’s European session. In doing so, the yen pair tracks the firmer Treasury bond yields while also cheering the hopes of stimulus at home, as well as respecting the US dollar’s broad recovery.
That said, the US 10-year Treasury bond yields pare the biggest daily loss in six months while adding 11 basis points (bps) to 3.82% by the press time. It’s worth noting that the benchmark bond coupons reversed from the highest levels since 2010 the previous day.
The US Dollar Index (DXY) also benefits from the firmer yields, as well as the market’s risk for risk-safety, while printing 0.70% intraday gains around 113.50. It should be observed that the greenback’s gauge versus the six major currencies reversed from the 20-year high the previous day after the Bank of England (BOE) announced a surprise bond-buying program.
Among the major risk-negative headlines are fears of global stagflation and recession in the Eurozone, recently backed by World Bank President David Malpass. Further, doubts about the Bank of England’s (BOE) capacity to restore the British economic performance while keeping the recently criticized fiscal plan weigh on the sentiment. Additionally, the hawkish commentary from the global central bankers, including those from Europe and the US, join the discomfort from China’s efforts to avoid recession, which seem to spoil the mood and favor the DXY.
At home, Japan readies more steps to ease the pain from the rising electricity bills, a government spokesperson signaled on Thursday. The diplomat underscored, per Reuters, underscoring the pressure it faces in addressing the burden on households of higher prices for imports from a weak yen. The news adds that Electricity bills have risen about 20% in the past year for households and by about 30% for businesses, Chief Cabinet Secretary Hirokazu Matsuno told a briefing, adding that such increases were becoming a "heavy burden" for consumers.
Amid these plays, the stock futures remain sluggish and the Asia-Pacific equities dwindle.
Moving on, updates surrounding the Bank of Japan’s (BOJ) efforts to defend the yen, as well as the Japanese government’s stimulus, will be important for the USD/JPY pair. Also, the final readings of the US Q2 Gross Domestic Product (GDP), expected to confirm -0.6% annualized figure, will be important to watch.
Technical analysis
Unless providing a daily closing beyond a three-week-old resistance line, around 144.90 by the press time, USD/JPY buyers remain cautious. The downside move, however, needs validation from the 21-DMA support surrounding 143.15.
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 stabilizes near 1.0800 as trading action turns subdued
EUR/USD holds steady near 1.0800 on Thursday and remains on track to end the day in negative territory following upbeat macroeconomic data releases from the US. The action in financial markets turn subdued as trading volumes thin out heading into Easter holiday.
GBP/USD extends sideways grind above 1.2600
GBP/USD fluctuates in a narrow channel above 1.2600 on Thursday. The better-than-expected Initial Jobless Claims data from the US and the upward revision to the Q4 GDP growth help the USD stay resilient against its rivals and limits the pair's upside.
Gold pulls away from daily highs, holds above $2,200
Gold retreats from daily highs but holds comfortably above $2,200 in the American session on Thursday. The benchmark 10-year US Treasury bond yield stays near 4.2% after upbeat US data and makes it difficult for XAU/USD to gather further bullish momentum.
XRP price falls to $0.60 support as Ripple ruling doesn’t help Coinbase lawsuit against SEC
XRP programmatic sales ruling by Judge Torres was completely rejected by another US Court that ruled in favor of the SEC in a lawsuit against Coinbase.
Portfolio rebalancing and reflation trades emerge into Q2
Yesterday’s price action pointed at a possible end-of-quarter portfolio rebalancing as the session saw the laggards of the quarter like Apple and Tesla gain, and the stars like Microsoft and Nvidia retreat.