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  • USD/JPY is now trading above the 200-day moving average of 111.32, having hit a low of 110.88 yesterday.  
  • Risk reset in equities is likely pushing JPY lower. At press time, the S&P 500 futures and major Asian indices are flashing green.  

USD/JPY scaled the 200-day moving average (MA) hurdle of 111.32 soon before press time and could rise further toward the 10-day MA, currently at 111.50 amid signs of risk reset with equities.  

As of writing, the futures on the S&P 500 index are trading 0.20 percent higher on the day. Major Asian indices like the S&P/ASX 200, Nikkei are also flashing gains.  

It appears the overnight risk-on action in the US equities has hit the Asian shores. The Dow Jones Industrial Average (DJIA) jumped 148 points or 2.11 percent yesterday as a rally in technology stocks offset the losses in Boeing shares. European stocks also rallied with banking shares gaining 1.5 percent.  

As a result, the anti-risk JPY is being offered across the board. Possibly adding to the bullish tone around USD/JPY could be the above-forecast retail sales number released yesterday. Consumer spending, as represented by retail sales, rose 0.2% in January, beating the expected print of 0 percent. Excluding autos and gas, spending doubled expectations with a 1.2 percent gain.  

With improved risk appetite, the currency pair risks extending gains toward the 50-day MA of 109.97.  

Technical Levels