- USD/JPY remains on the front foot for the fifth consecutive day.
- Risks remain positive amid US stimulus hopes, vaccine optimism.
- Comments from BOJ’s Kuroda, Japan FinMin Aso adds to the upside momentum.
- US Treasury yields refresh yearly top, stocks in Asia and S&P 500 Futures up as well.
USD/JPY rises to the fresh weekly high of 105.56, currently around 105.50, during the early Tuesday. In doing so, the yen pair prints a five-day uptrend while respecting the risk-on mood as well as downbeat comments from Japan.
Japan Finance Minister (FinMin) Taro Aso earlier ruled out chatters to recall the fiscal support measures amid the rally in Nikkei 225 to the highest since 1990. Following that the Bank of Japan (BOJ) Governor Haruhiko Kuroda refrained from calling the latest stock rally ‘excessive’.
Also favoring the USD/JPY bulls could be the upbeat market sentiment as portrayed by the US 10-year Treasury yields’ run-up to the 11-month high. Additionally signaling the optimism are over 0.65% gains of S&P 500 Futures and 1.20% intraday rise of the Nikkei 225.
Read: US Treasury yields refresh yearly high amid risk-on mood
Behind the moves could be the return of the traders from the US and Hong Kong amid welcome signs concerning the coronavirus (COVID-19) vaccine and the US covid relief package. Additionally, Japan’s readiness for mass immunization adds strength to the bullish mood. It’s worth mentioning that the improvement in the virus conditions in Japan offers extra strength to the trading sentiment. As per Kyodo News, “A total of 965 daily coronavirus infections were reported in Japan on Monday, coming in below the 1,000 mark for the first time in three months, while the number of deaths related to COVID-19 topped 7,000.”
Looking forward, an absence of major catalysts at home and off in China can challenge the bulls ahead of the US session wherein the American traders’ reaction to the latest risk-on mood will be closely observed for fresh impulse.
Technical analysis
A six-week-old rising channel favors the USD/JPY bulls to refresh the monthly high above 105.79 while eyeing the 106.30 upside hurdle, comprising the stated channel’s resistance. Alternatively, sellers need to defy the bullish chart patterns, by a downside break of 104.50, to retake the controls.
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