- USD/JPY fails to keep the week-start jump.
- Trade sentiment remains heavy amid uncertainty over the easing of global lockdowns.
- BOJ will be the key amid concerns over scrapping the bond purchase limit, cutting economic forecasts.
- No major data/events will keep pandemic headlines on the driver’s seat.
USD/JPY fails to hold the week-start jump from 107.50 to 107.62 while making the rounds to 107.50 amid the early Monday morning in Asia. While the broad US dollar weakness could be considered as weighing over the pair, cautious sentiment ahead of tomorrow’s BOJ might have restricted the immediate moves.
Also read: What you need to know for markets opening: BoJ, Brexit and N.Korea a focus
PM Abe under pressure to extend the emergency, BOJ could express pandemic fears…
Unlike US President Donald Trump, who has been pushing for an early economic restart than later, policymakers at Japan, as per Bloomberg, push for the extension of national emergency amid the widespread outbreak. “Multiple unidentified officials said in a separate report by Jiji that an extension of the emergency was unavoidable, though it was unclear how long or broad such a move would be. One was cited as saying one more week was the most that people could endure, while another saw the need to maintain the emergency until the end of May,” said Bloomberg.
The news cites figures from Tokyo as recording a second straight decline in the daily toll Sunday with 72 new coronavirus cases, the first time in 13 days that the number of infections has been below 100. Deaths in the city passed 100 on Saturday.
Read: Coronavirus update: US CDC reports its count of 928,619 cases vs previous report of 895,766
It should also be noted that the failure to find a cure for the pandemic as well as downbeat data have recently weighed on the US dollar and diverted market players towards the traditional safe-havens like Japanese yen and Gold.
However, fears ahead of Tuesday’s Bank of Japan (BOJ) meeting seem to restrict the JPY’s gains. The Japanese central bank is widely anticipated to cut its economic and price forecasts in the quarterly report while also likely to alter the bond purchase limit.
That said, the Asian economic calendar is quiet today and hence the virus updates remain as the key catalyst to watch for the near-term direction.
Technical analysis
A three-week-old falling trend line, currently near 107.75, restricts the pair’s near-term upside while the monthly low near 106.90 seems to act as the immediate key support.
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