- USD/JPY bulls cheer dollar bounce and upbeat mood.
- Optimism on the US economic recovery persists ahead of US data.
- US-China tensions will remain a drag on the spot.
Having tested the critical 21-Hourly Simple Moving Average (HMA) support at 108.83, USD/JPY bounces back above 109.00 and refreshes two-month highs at 109.16.
The spot is challenging the further upside on the 109 handle amid a swift recovery in the Asian equities. The Nikkei 225 closed 0.36% higher amid ongoing optimism over the global economic rebound and massive stimulus. The upbeat narrative continues to offset the US-China tensions and keeps the global stocks buoyed.
Further, the broad-based US dollar rebound from three-month troughs, following the upbeat US macro news and looming US-China tensions, also please the buyers so far this Thursday.
On Wednesday, Reuters quoted some sources, saying that the US administration is expected to impose sanctions on four additional state-run Chinese media outlets, designating them as foreign embassies.
On the Japanese-side of the equation, the latest Reuters report that Japan’s new economic stimulus package is estimated to boost real GDP by about 2% fails to offer any respite to the JPY bulls, as USD/JPY remains solely driven by the risk-sentiment.
The market focus now remains on the US weekly Jobless Claims data and sentiment on the global markets for additional strength in the spot.
USD/JPY technical levels to watch
The upside targets are seen at 109.35 (classic R3) and 109.50 (psychological levels) in the near-term. To the downside, the next supports are aligned at 108.83 (21-HMA), 108.51 (50-HMA) and 108.00 (round figure).
USD/JPY additional levels
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