- USD/JPY prints two-day losing streak after reversing from 107.92.
- US President Trump cited sanctions on China, fresh protests brewing in Hong Kong against the security bill.
- A lack of major data/events put the US-China tussle back in focus for immediate direction.
USD/JPY prints 0.07% losses on a day, currently around 107.47, while stretching the previous day’s weakness forward during the initial Tokyo open on Wednesday. That said, the pair took a U-turn from a five-day top of 107.92 to close near 107.55 on Tuesday.
In addition to US President Donald Trump’s signals that sanction on China coming by the end of the week, US Senator Marco Rubio tweet suggested further hardships for the Asian major if it moves ahead with Hong Kong Security Bill.
Also challenging the risk-tone could be Reuters’ story that cites fears of fresh protests in Hong Kong (HK). The new said, “A large rally is expected today in HK to protest China’s proposed new national security laws. HK authorities have erected a two-metre-tall (6 feet) set of plastic barriers filled with water around the HK Legislative Council (Legco) Complex.
As a result, the US 10-year treasury yields fail to keep the previous day’s upside momentum while falling to 0.695% whereas Japan’s NIKKEI also remains downbeat around 21,265.
Adding to the Japanese yen strength could be announcement from Japan PM Shinzo Abe that showed readiness to offer 140 trillion yen of financial support to companies.
It’s worth mentioning that the optimism surrounding the major economies’ reopen and nearness to finding the coronavirus (COVID-19) cure mainly offered weakness to the US dollar on Tuesday, which in turn weighed on the USD/JPY pair.
Considering the lack of major data/events up for publishing during Wednesday’s Asian session, traders will keep eyes on the US-China tussle surrounding the Hong Kong bill for fresh direction.
Technical analysis
Sellers await entries below 21-day EMA level of 107.40 while buyers remain hopeful of visiting 108.00 mark that nears 100-day EMA.
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