- USD/JPY eases from intraday top but keeps the previous day’s recovery moves.
- Vaccine, stimulus news favor risks ahead of Biden’s likely upbeat speech.
- Rumors over BOJ’s stepping back from six trillion yen ETF target spread.
- Data from Japan has been sluggish, risk catalysts occupy the driver’s seat.
USD/JPY stays firm, recently easing from 108.58, while taking round to 108.55 as markets in Tokyo open for Friday. The risk barometer justifies positive sentiment as traders cheer US President Joe Biden’s passage of $1.9 trillion stimulus. Though, bulls are chained ahead of the key speech from US President.
Having recently unveiled $1.9 trillion to combat the coronavirus (COVID-19), chatters do take rounds that US President Biden has a $2.5 trillion infrastructure plan in his pocket that will be proposed next month. Also on the risk-positive side could be the latest announcements from the White House suggesting Biden’s readiness to announce “back to normal” by July and vaccines for all adults before May 01.
Vaccine updates from Novavax and AstraZeneca are also important to the risks as the former suggests the upbeat capacity to battle the UK covid strains whereas the later conveys the inability to match delivery targets for the European Union (EU).
Elsewhere, chatters that the Bank of Japan (BOJ) will drop its Exchange Traded Fund (ETF) target of six trillion yen, as well as widen Japanese Governor Bond (JGB) yield target band, offer an extra filter to the risks. Comments from the Japanese Health Ministry suggesting a sustained rise in Tokyo’s covid numbers also weighs on risks.
Furthermore, the US-China tension and the Canberra-Beijing tussles join the ECB’s hidden concerns for reflation to weigh on the mood.
Against this backdrop, S&P 500 Futures drop 0.15% whereas Japan’s Nikkei 225 rises 0.26%. On Thursday, global equity markets cheered US stimulus news with the key Wall Street benchmarks flashing record tops on closing.
Moving on, USD/JPY traders should pay close attention to US President Joe Biden’s speech as it is likely to offer another reason for the bulls to aim for 110.00.
Technical analysis
A clear break of the 13-day-old support line, now resistance around 108.70, directs USD/JPY sellers to 108.00 surrounded by July 2020 top and 10-day SMA.
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