- Yen gains momentum as Wall Street drops further and EM currencies struggle.
- USD/JPY retreats from 3-week highs.
The USD/JPY pair has been moving with a bearish bias since the Asian session. Recently dropped further and printed a fresh daily low at 111.11, slightly above yesterday’s low. The greenback is retreating after hitting the highest since August 3 on Wednesday at 111.81.
The US dollar is mostly higher across the board but the biggest gainer is the yen boosted by risk aversion. In Wall Street, the Dow Jones is at 3-day lows down 0.43% while the S&P500 falls 0.29%. The major concern today are emerging markets. The US dollar gains 18% versus the Argentina peso, 11% vs the Turkish lira and 2.85% vs the South African rand.
US data released today included the core PCE that came in line with expectations at 0.2% (MoM) and 2.0% (YoY). The numbers had no influence on market participants offset by the sell-off in EM currencies.
USD/JPY Levels to watch
Below 111.00, immediate support is seen at 110.90/95 (Aug 27 & 28 low), 110.65 (Aug 20 high) and 110.30 (Aug 17 low). On the flip, side resistance could be located now at 111.30, 111.45 (Aug 24 high) and 111.75 (Aug 30 high).
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