- USD/JPY trades around 110.65 during early Monday.
- The pair reversed earlier gains as looming risk over Trump-Xi meet joins signals from the Japanese official.
- 110.55 has been immediate important support for the pair contrast to the 110.90 trend-line resistance.
The USD/JPY pair is at bid around 110.65 heading towards European session on Monday. The pair initially rose to 110.85 on optimism surrounding the US-China trade deal before declining to 110.60 as risk-on moderated afterward. Adding to the sentiment were comments from the Japanese PM Abe’s Economic Adviser that wasn’t favoring the BoJ’s inflation targeting.
During early Monday, news that the US President is ready to postpone tariff hikes on Chinese imports triggered market risk-on and propelled the USD/JPY to the day’s high of 110.86.
However, the pair failed to hold the gains as investors fear for the final outcome from the meeting between the US President Donald Trump and his Chinese counterpart Xi Jinping in Florida that’s still awaited for a final decision on the trade.
From Japan, Koichi Hamada, an economic adviser to Prime Minister Shinzo Abe, recently said that the Bank of Japan (BoJ) can do away with its inflation target or efforts to achieve it if the job market is strong enough because people desire prices to fall, not rise. Mr. Hamada, however, refrained from advising immediate action from the Japanese central-bank during his additional comments.
With this, USD/JPY dropped to the intra-day low of 110.58 as traders compare chances of BoJ’s future policy change to the looming risk due to Trump-Xi meet.
USD/JPY Technical Analysis
Repeated failures to slide under 110.55 signal brighter chances for the pair’s pullback to 110.80 but an immediate downward sloping resistance-line at 110.90 can challenge buyers targeting 111.15.
Meanwhile, a downside break of 110.55 can reprint 110.30 and 110.00 as quotes.
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