- USD/JPY remains positive near the three-week top flashed on Wednesday.
- Market sentiment stays mixed alike the recently flashed second-tier data from Japan.
- Hopes of further stimulus, virus vaccine combat the jump in the US infections.
- US inflation, jobless data will join the risk catalysts to offer immediate direction.
USD/JPY picks up bids near 105.45/50, up 0.05% intraday, as markets in Tokyo open for Thursday’s trading. In doing so, the quote keeps the previous day’s upside momentum that probes the highest levels last seen on October 20. While risks barometers and the recently published data flash mixed signals, the yen bulls are likely cheering hopes of further stimulus.
Japan’s Producer Price Index (PPI) for October remains unchanged near -0.2% MoM and matched -2.1% forecasts on YoY. This contrasts with the September month Machinery Orders that recovered from -15.2% prior and -11.6% expected to -11.5% YoY.
Be it BOJ officials or Japanese diplomats and political leaders, everybody has agreement over the need for further stimulus. The mood also takes clues from the recent refrains to go negative on the benchmark interest rates by the leading central banks, like BOE, RBNZ and RBA.
Elsewhere, coronavirus (COVID-19) cases in the US remain above 100,000 in the last few days, over 114,000 recently, while the hospitalizations also jump to the record. This pushes the world’s largest economy towards the European conditions of local/national lockdowns, which in turn challenges the market sentiment.
Talking about positives, leading vaccine producers like Pfizer and Moderna are flashing signs that the cure to the deadly virus will be out soon. Chatters around the US stimulus and further improvement in the US-Japan relations under the Democratic leadership also favor the optimists.
That said, S&P 500 Futures struggle for clear direction near 3,570, up 0.05% intraday, whereas Japan’s Nikkei 225 gains nearly 225 points or 0.90% to probe 22,580. It’s worth mentioning that the US 10-year Treasury yields drop 2.7 basis points to 0.962% by press time.
Looking forward, the US traders return from the Veterans Day Holiday will be the key as they have headlines inflation for October and the weekly Jobless Claims to watch. Even so, risk catalysts will gain comparatively more attention.
Technical analysis
A successful break above the falling trend line from July 01, at 105.38 now, USD/JPY bulls are all set to challenge the October peak surrounding 106.10.
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