“¢ Trump’s positive trade-related comments prompt some short-covering move.
“¢ BoJ Governor Kuroda’s comments weigh on the JPY and remained supportive.
The USD/JPY pair staged a goodish rebound during the Asian session on Tuesday and recovered a major part of the overnight slump to over three-month lows.
The pair sank to the 109.00 neighbourhood on Monday – the lowest since February 1, in wake of some aggressive safe-haven flows towards the Japanese Yen after China announced to raise tariffs on $60 billion worth of US products from June 1.
The move comes after the US escalated the trade tensions by hiking tariffs on $200 billion of Chinese products on Friday, which added to market concerns about a full-blown US-China trade war and underpinned the Japanese Yen’s safe-haven demand.
However, a modest US Dollar rebound, coupled with some positive comments by the US President Donald Trump, saying that Chinese trade negotiations will be successful, helped ease the bearish pressure and prompted some short-covering move on Tuesday.
Meanwhile, the BoJ Governor Kuroda reiterated the need to continue easing for a while, which exerted some additional downward pressure on the Japanese Yen and remained supportive of the pair’s goodish intraday up-move back above mid-109.00s.
In absence of any major market moving economic releases from the US, the broader market risk sentiment – driven by any fresh trade-related news/developments, and the USD price dynamics might continue to influence the price action on Tuesday.
Technical levels to watch
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