“¢ Risk-off mood boosted JPY’s safe-haven demand and prompted some profit-taking.
“¢ The ongoing upsurge in the US bond yields seemed to help limit deeper losses.
The greenback held on the defensive against its Japanese counterpart, with the USD/JPY pair eroding a part of previous session’s strong up-move to fresh YTD tops.
A slight deterioration in investors’ appetite for riskier assets, as depicted by a weaker tone around equity markets boosted the Japanese Yen’s safe-haven status and prompted some profit-taking.
The downside, however, remained cushioned amid the ongoing upsurge in the US Treasury bond yields, supported by overnight hawkish comments by the Fed Chair Jerome Powell, saying that the Fed may raise interest rates past ‘Neutral’.
This coupled with Wednesday’s upbeat ADP report and ISM non-manufacturing PMI continued underpinning the US Dollar demand and helped limit any deeper corrective slide, at least for the time being.
In absence of any major market moving economic releases from the US, the broader market risk-sentiment and the USD price dynamics might influence the pair’s momentum through Thursday’s trading action.
The key focus, however, will be on Friday’s official US monthly jobs report – popularly known as NFP, which tends to infuse volatility across global financial markets and might now play an important role in determining the pair’s next leg of directional move.
Technical levels to watch
Any subsequent fall is likely to find support near the 114.00 handle, which if broken might trigger some additional long-unwinding trade and accelerate the corrective slide further towards mid-113.00s.
On the flip side, sustained move beyond the 114.50-55 region now seems to pave the way for an extension of the pair’s bullish trajectory further towards reclaiming the key 115.00 psychological mark.
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