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  • USD/JPY stays bid while rising to the fresh high since March 26, 2020.
  • US infrastructure plan headlines seem to favor sentiment off-late.
  • Beijing versus the West and covid woes seem to favor the US Treasury and dollar bulls.
  • Japan’s Industrial Production recovered in February but traders await US President Biden’s speech and mostly ignored data.

USD/JPY takes the bids around 110.62, the highest level in one year, amid the initial hour of Tokyo open on Wednesday. The risk barometer recently gained amid upbeat forecasts over US President Joe Biden’s upcoming infrastructure plans. Also favoring the bulls could be the broad US dollar strength, backed by the US Treasury yields rally to early 2020 peak.

The chatters suggesting no major tax hikes in US President Biden’s infrastructure spending proposal recently crossed wires and favored the risks. Additionally, Biden’s push for faster US vaccines and American readiness to re-discuss the nuclear deal with Iran also brighten the sentiment.

It should be noted, however, that the UK’s push to get tough on China and the United Nations (UN) inaction on North Korea’s missile test weigh on the mood. Additionally, allegations over stealing thousands of the US State Departments’ data on Russia join American dislike for Beijing’s play in Hong Kong politics and delay in elections to heavy the sentiment.

Amid these plays, US 10-year Treasury yield wobbles around January 2020 high whereas S&P 500 Futures print 0.17% intraday gains even as Wall Street closed on the mildly negative side the previous day.

Talking about the data, preliminary readings for Japan’s February month Industrial Production recovered from -5.2% YoY prints to -2.6%. It’s worth mentioning that the US CB Consumer Confidence rose to a year’s high the previous day and favored the US dollar index (DXY) to poke the late November 2020 top.

Moving on, US ADP Employment Change for March, expected 500K versus 117K, can offer intermediate directions to the USD/JPY prices ahead of US President Biden’s speech around 16:20. Also important will be the headlines affecting the risk, mainly concerning the coronavirus (COVID-19) in Europe and Australia as well as China-linked news.

Technical analysis

A clear break above the downward sloping trend line from October 2018, around 110.35 by the press time, favor USD/JPY bulls to aim for the 111.00 threshold during the further rise.