- USD/JPY rose from 111.10 to 111.65 overnight and currently trades at 111.64 between a range of 111.58 and 111.68.
- USD/JPY is currently trading on the bid in Tokyo in a relatively slow market in the G10s while US stocks also lacked velocity.
The Dow Jones Industrial Average (DJIA), lost a marginal 14 points, or less than 0.1%, to end near 26,143 while the S&P 500 ended flat at 2,888 and the Nasdaq Composite lost 0.2% to finish around 7,947. Earnings season will be a major driver – On Friday, eyes will be on JPMorgan Chase & Co. and Wells Fargo & Co.representing the banking sector that starts off the earnings season.
US data
Producer prices were up to their strongest increase in five months, rising 0.6% m/m in March – (stronger petrol prices were benefiting). However as analysts at ANZ bank note, “Core measures were softer suggested a lack of underlying pipeline inflationary pressures. On an unadjusted basis, the index increased by 2.2% y/y, ahead of market expectations of 1.9%.
As for yields, the US 10yr treasury yield rose from 2.47% to 2.51%, the 2yr yield from 2.32% to 2.36%. The chances of a Fed rate cut by December, implied by Fed fund futures, fell from 75% to 65%.
USD/JPY levels
Valeria Bednarik, Chief Analyst at FXStreet, explained that the dollar’s momentum extends with the USD/JPY technically bullish:
“In the 4 hours chart, the price is firmly advancing above its moving averages, while technical indicators extended their recoveries well into positive ground. The immediate resistance is this month high at 111.81, followed by the yearly top at 112.13. Large stops are suspected above this last, and if those get triggered, the pair could extend its advance up to the 112.40/50 price zone.”
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