USD/JPY: Yen loses ground on Japan political woes, back above 111.00
The USD/JPY pair witnessed volatile moves in early Asia on the release of the Japanese data dump, although steadied towards late-Asia/ early Europe, as focus remains on the USD price-actions ahead of the critical US Q2 advance GDP release.
The spot dipped briefly below 111 handle, but quickly regained the last, as markets digested mixed economic news out of Japan. The Japanese CPI data bettered expectations, while the retail sales data came in downbeat, offering little support to the Yen. Moreover, fresh political headlines from Japan also dented the sentiment around the Japanese currency, in the wake of declining popularity of Japan’s PM Abe.
In the day ahead, it remains to be seen if the USD/JPY pair manages to hold 111 handle, as post-FOMC weakness appear to have resumed in the US dollar versus amid renewed losses seen in Treasury yields, as markets look past upbeat US durable goods orders data, with all eyes now remaining on a fresh batch of US macro updates due later in the NA session, including the durable goods data.
USD/JPY Technical levels
To the topside, a daily close above confluence zone of 10, 100 & 50-DMA located between 111.44-68 would shift risk in favor of a re-test of 112.37 (20-DMA) beyond which 112.84 (200-DMA) would be back on sight. A break below 111.80/79 (27 & 25 July low) would open doors for 111.50 (psychological levels). A break lower would yield a test of 111 (round number).
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.
