USD/JPY: Volatile trading extends but to the downside in Asia

USD/JPY hit fresh six-month lows below 130.00 in Asia this Tuesday.
The Japanese yen rallied on BoJ speculation and negative Asian stock markets.
The US Dollar rebound cushions the downside in USD/JPY ahead of US PMI.

Dhwani Mehta FXStreet

USD/JPY is under intense selling pressure near the 130.00 level, having hit fresh six-month lows at 129.82 in the last hour. The sudden downturn got triggered after the pair faced rejection at daily highs of 131.40, witnessing a wild swing of around 160 pips in a couple of hours.

The Japanese yen sees massive inflows

The downswing in the pair was mainly triggered by a fresh spurt of the Japanese Yen buying, as the US equity futures skidded at the open and bolstered the safe-haven flows into the Yen. Moreover, speculation surrounding the potential for a hawkish pivot by the Bank of Japan (BoJ) to tackle inflation could be attributed to the massive JPY strength in early trades.

Lower liquidity due to a public holiday in Japan also exaggerated the moves in the major. Looking ahead, the US S&P Global Manufacturing PMI will be eyed, as it’s the first macroeconomic release out of the US at the start of 2023. Although the US Federal Reserve December meeting minutes, due on Wednesday, will grab attention, as it would show many members saw risks that interest rates would need to go higher for longer.

USD/JPY: Technical levels to consider

USD/JPY

Overview
Today last price	130.10
Today Daily Change	-0.65
Today Daily Change %	-0.50
Today daily open	130.72

Trends
Daily SMA20	134.6
Daily SMA50	139.2
Daily SMA100	141.08
Daily SMA200	136.26

Levels
Previous Daily High	131.13
Previous Daily Low	130.62
Previous Weekly High	134.5
Previous Weekly Low	130.78
Previous Monthly High	138.18
Previous Monthly Low	130.57
Daily Fibonacci 38.2%	130.82
Daily Fibonacci 61.8%	130.94
Daily Pivot Point S1	130.52
Daily Pivot Point S2	130.31
Daily Pivot Point S3	130
Daily Pivot Point R1	131.03
Daily Pivot Point R2	131.34
Daily Pivot Point R3	131.55

Author

Dhwani Mehta

FXStreet

Residing in Mumbai (India), Dhwani is a Senior Analyst and Manager of the Asian session at FXStreet. She has over 10 years of experience in analyzing and covering the global financial markets, with specialization in Forex and commodities markets.

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