- USD/JPY traders catch after risk-off dominated the previous day.
- US-China trade tension prevails with the hard Brexit fears dominating the mood.
- Upbeat US data managed to mitigate the losses, eyes Japan’s trade numbers for now.
After a day of fresh risk-off moves, USD/JPY seesaws around 109.50 ahead of the Wednesday’s Tokyo open. The safe-haven Japanese Yen (JPY) benefited from the market’s trade/Brexit fears but the broad US Dollar (USD) strength kept the gains in check.
With the UK PM’s readiness to crash out of the European Union (EU) before 2020 ends, traders realigned their Brexit fears and rushed to risk-safety on Tuesday. Among them, the US Dollar (USD) turned out to be the winner as upbeat industrial production and housing data offered additional strength to the greenback.
On the trade front, markets doubt the future of the US-China friendship, even after the phase-one, as the US keeps its pressure on Huawei while also staying ready to use a 25% tariff push as the key for phase-two talks.
The recent headlines across the board suggest mixed clues with the global rating agencies like Fitch and S&P praising the UK after the general election. Even so, Fitch held its warning tone up while saying, “a phase one US/China trade deal alone unlikely to eliminate uncertainty given prolonged phase two negotiations on structural issues.”
Additionally, NIKKEI suggests that Japan’s government is considering a reduction in the Japanese Government Bonds (JGB) to 32.5 trillion Japanese yen (JPY) versus 32.7 trillion figure in the previous fiscal year. On the contrary, MNI quoted ex-Bank of Japan (BOJ) official while saying that it’s difficult for BOJ to say there is momentum toward the 2% inflation.
With this, the US 10-year treasury yields stay sluggish around 1.875% while S&P 500 Futures also losing 0.15% to 3,195 by the press time.
Moving on, Japan’s November month trade data becomes an immediate catalyst while overall risk-tone remains dependent on trade/Brexit headlines.
Technical Analysis
Unless breaking 109.70/75 area, prices are less likely to lure buyers. On the contrary, 109.00 and 108.45/40 seem to be on the table for now.
Share
