USD/JPY holds 104.00 amid hopes of BOJ stimulus, mixed sentiment

• USD/JPY buyers attack the upper end of recent trading range between 104.00 and 104.10.
• Bank of Japan (BOJ) eyes extension of corporate funding during Friday’s decision.
• Biden’s official victory in the US presidential elections join virus updates, Brexit news to portray mixed mood.

USD/JPY refreshes intraday high above 104.00 while picking up bids near 104.10 amid the initial hour of Tuesday’s Tokyo open. The yen pair recently rose after the market’s risk-tone improved on news of BOJ’s further stimulus as well as US President-elect Joe Biden’s victory in the Electoral College. However, the upside seems to have been probed by fears of the coronavirus (COVID-19) and no-deal Brexit woes.

As per Nikkei, BOJ may cite fresh economic fears, based on the COVID-19 resurgence in Tokyo, coupled with the December Tankan Survey of Enterprises in Japan, while stretching the corporate aid package by six months beyond the current deadline of March 2021.

Talking about the risks, the Democratic Party member Joe Biden officially wins the US Presidential Election 2020. The recent update from the Electoral College voting allows the ex-Vice President to have the required 270 votes to occupy the White House.

Also favoring the risks could be the hopes of the US covid stimulus as House Speaker Nancy Pelosi and Treasury Secretary Steve Mnuchin push policymakers toward an early aid package while also marking good progress in the negotiations.

Meanwhile, the latest local lockdowns in the northern hemispheres join the surge in Tokyo’s virus figures, to 181,265 by December 13, 2020, per Kyodo News, to challenge the mood. Further on the negative side could be the fears of no-deal Brexit and the US-China, Canberra-Beijing tussles.

Against this backdrop, Japan’s Nikkei 225 drop 0.10% and S&P 500 Futures print near 0.30% intraday gains whereas Australia’s ASX 200 declines 0.20% by press time.

Looking forward, China’s November month Retail Sales and Industrial Production can offer immediate direction but the overall command remains in the hand of the risk catalysts. Among them, virus updates and stimulus headlines can offer a clearer vision.

Technical analysis

Monday’s dragonfly doji on the daily (D1) chart suggests the USD/JPY bulls can return to the fore. Though, a one-month-old resistance line near 104.45 can challenge the short-term upside momentum of USD/JPY.