- Markets cheer positive clues from the US-China trade discussions and Brexit.
- Risk-events continue to remain in the spotlight with less data on hand.
The USD/JPY pair is on the bids around 111.00 as Tokyo markets open on Thursday. Recently positive news reports concerning the trade deal between the US and China, coupled with Brexit deadline extension, joins mixed investment data from Japan to please the buyers. However, risk events and the US economic data will be in limelight from now onwards.
The Financial Times report that the US and China took another step forward and agreed to open enforcement offices in their respective countries to see better adaptations to the deal triggered early-day risk-on.
The risk sentiment was further supported by the Brexit developments at the EU summit and mixed Japan investment data. The EU leaders agreed to offer the Brexit deadline extension until October 31 to the UK. Japan’s foreign bond investment dropped to -1753.4 billion Japanese Yen (JPY) from upwardly revised 1243.90 billion prior whereas foreign investment in Japan stocks grew 1463.7 billion JPY from 438.5 billion (revised) previous.
The US 10-year treasury yield, the barometer of broader risk sentiment, is almost flat near 2.47%.
Global markets now look forward to the developments surrounding highlighted risk events like the US-China trade deal and Brexit. Adding to the burden is the latest developments surrounding North Korea as the Yonhap news reports that the North Korea leader signalled the need to deliver a serious blow to those imposing sanctions. Mr Kim is likely to meet the Russian leader soon. That seems a challenge to the US as Mr Trump is recently pressing the hermit kingdom for not obeying the nuclear deal proposed earlier.
The US initial jobless claims for the week ended on April 05 could also affect the market sentiment considering recent upbeat non-farm payrolls and the contrasting figures of JOLTS job openings. The first-time unemployment benefit claims may rise to 211K from 202K prior.
USD/JPY Technical Analysis
Having bounced off the 50-day and 100-day simple moving average (SMA) confluence region, the USD/JPY pair can target 111.30 ahead of confronting 200-day SMA level of 111.50 and current month high near 111.85.
On the downside, 110.95/90 support-confluence seem strongly challenging bears, a break of which can reprint 110.70. 110.30 and 109.80 rest-points on the chart.
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