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  • USD/JPY fails to extend Wednesday’s losses from 107.99 to 107.33.
  • Risk-tone remains mildly positive as Wall Street cheers hints for further easing.
  • US-China, Aussie-Sino tussles largely ignored, no major updates on the virus.
  • Japan trade data can offer immediate direction.

While extending its gradual recoveries from 107.33, USD/JPY prints 107.56 as a quote ahead of Thursday’s Tokyo open. That said, the broad US dollar weakness could be cited as the reason for the pair fall on Wednesday whereas Wall Street performance seems to favor the latest pullback moves.

Greenback loses “market-favorite” spot…

Despite the FOMC minutes’ defying negative Fed rates, supporting nearly the same comments from Fed’s Kaplan, the US dollar dropped to the month-start low on Wednesday.

The greenback might have been suffering from the market’s cautious optimism towards the coronavirus (COVID-19) cure as well as increased odds of the broad economic restart after the virus-led lockdowns. Also boosting the risk-on sentiment could be the clues of additional monetary/fiscal easing from almost all central banks, governments.

In doing so, the US currently might have been paying a little heed to China’s recent tussles with the US and Australia. While the Trump administration seems to be at an upper hand over its fight with China, Australia is bearing the burden of favoring virus investigation against the dragon nation.

To portray the trading sentiment, Wall Street registered notable gains by the end of Wednesday’s trading whereas the US 10-year Treasury yields recover the early-day losses to 0.69%. On the other hand, the US dollar index (DXY) seesaws around 99.16, up from the previous day’s low of 99.00, by the press time.

Looking forward, April’s monthly trade numbers from Japan and the preliminary reading of Jibun Bank Manufacturing PMI will be the nearby catalysts to watch. However, these don’t supersede the importance of trade/virus updates to move the market.

Technical analysis

A two-week-old ascending trend line around 107.40 restricts the pair’s near-term downside ahead of the 21-day SMA level near 107.05. Though, buyers are also likely to struggle unless witnessing a daily close beyond 50-day SMA level of 107.90.