“¢ Improving risk-sentiment undermined JPY’s safe-haven demand and extended some support.
“¢ Weaker US bond yields/dismal Chinese macro data kept a lid on any strong follow-through.
“¢ Market participants now eye Wednesday’s US economic data for short-term trading impetus.
The USD/JPY pair struggled to capitalize on the overnight attempted recovery from three-month lows and remained confined in a narrow trading band, just above mid-109.00s.
With investors still absorbing shocks from the recent escalation in the US-China trade tensions, improving risk sentiment weighed on the Japanese Yen’s relative safe-haven status and helped the pair to register a modest recovery on Tuesday.
A modest pickup in the US Dollar demand remained supportive of the positive momentum, albeit the lack of follow-through recovery in the US Treasury bond yields turned out to be one of the key factors keeping a lid on any subsequent up-move.
As the market focus remains on trade-related news/developments, the latest disappointment from Chinese macro data renewed concerns over the state of the global economy and further collaborated towards capping the pair, at least for the time being.
Moving ahead, Wednesday’s US economic docket – highlighting the release of monthly retail sales along with Empire State Manufacturing Index and industrial production data, will now be looked upon for some fresh impetus later during the early North-American session.
Technical levels to watch
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