- USD/JPY respects the broad USD strength.
- Hong Kong protests, trade tension keep challenging risk tone.
- US President Trump’s comments on the trade deal with China in focus.
With the resumption of the US bond trading, the USD registers broad recovery. The USD/JPY, being no exception, takes the bids near 109.20 during early Tuesday.
The US bond traders’ return, after Monday’s Veterans Day Holiday, witnesses sluggish market conditions amid uncertainty over the US-China trade deal and protests in Hong Kong. As a result, the US 10-year Treasury yields drop one basis point to 1.92% while Asian stocks flash mixed signals.
That said, the US dollar (USD) regain its strength as markets keep favoring the greenback in search of a risk safety. Also contributing to the pair’s weakness could be Japanese Prime Minister (PM) Shizo Abe’s comments supporting the need for a budget to assist economic recovery.
Investors largely ignored expectations of the United States (US) tariff roll back from the European Union (EU) automobiles and upbeat comments from Japanese Economy Minister Yasutoshi Nishimura.
While trade/Hong Kong issues will keep traders entertained, US President Donald Trump’s comments from the Economic Club of New York’s lunch will also be the key to watch. The US President is widely anticipated to shed light on the much-needed US-China trade relations and the US tariff policy.
Technical Analysis
Bulls targeting 110.00 will look for entry beyond the recent high of 109.50 whereas 21-day Simple Moving Average (SMA) around 108.75 could act as immediate support.
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