- USD/JPY edges lower for the second straight session on Wednesday.
- The prevalent cautions mood benefitted JPY’s safe-haven status.
- The downside remains cushioned as the focus shifts to BoJ decision.
The USD/JPY pair remained on the defensive for the second consecutive session on Wednesday, albeit remained well within a familiar trading range around mid-109.00s.
The pair remained capped below the 109.70-75 region – multi-month tops set earlier this December – and edged lower on Tuesday amid the prevalent cautious mood, which benefitted the Japanese yen’s perceived safe-haven status against its American counterpart.
Weighed down by the prevalent cautious mood
Renewed risk of a no-deal Brexit kept a lid on the recent optimism led by the US-China trade agreement and weighed on investors’ sentiment. Bearish traders further took cues from a modest pullback in the US Treasury bond yields, though lacked strong conviction.
The downside remained cushioned on the back of some follow-through pickup in the US dollar demand. The greenback remained supported by Dallas Fed President Robert Kaplan’s comments that interest rates will be kept on hold unless there is a drastic change in the U.S. economic outlook,
This coupled with the disappointing release of Japanese export data, which recorded its 12th straight month of decline and fell 7.9% YoY in November. The data undermined demand for the domestic currency and further collaborated towards limiting the downside.
There isn’t any major market-moving economic data due for release from the US on Wednesday. Hence, the USD price dynamics and the broader market risk sentiment might continue to act as key determinants of the pair’s momentum ahead of the BoJ policy decision on Thursday.
Technical levels to watch
Share
