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  • USD/JPY trims early Asian gains while keeping Friday’s corrective recovery.
  • US Congress passes $900 billion stimulus, one-day stopgap funding bill.
  • Nikkei suggests Japan PM asked Finance Ministry to keep USD/JPY above 100.00.
  • Brexit, new covid variant challenge the risks amid a light calendar.

USD/JPY trims the intraday gains while declining to 103.35 amid the initial hour of Monday’s Tokyo open. While passage of the US coronavirus (COVID-19) stimulus and a stopgap funding plays positive for the pair, Brexit woes join the fears of a new covid variant to weigh on the quote.

US Congress giving final touches to the $1.4 trillion omnibus and the $900 billion COVID-19 relief bill. Further, The policymakers recently agreed on the one-day stop-gap funding.

Read: US House Speaker Pelosi: Congressional Democrats have reached an agreement…

Also on the positive side could be a news piece from Nikkei, relying on multiple sources, which confirms Japanese PM Yoshihide Suga’s push to the Finance Ministry to keep USD/JPY above 100.00. This could come in the form of further yen selling, stated in the news.

Read: Japanese intervention to protect USD/ JPY above psychological 100

On the contrary, the European Union (EU) and the UK diplomats are likely to fail in writing the Brexit deal as differences over fisheries and level playing field remain. EU Chairman of the Foreign Affairs Committee David Callister mentioned in a tweet that the European Parliament will not be in a position to grant consent to an agreement this year.

Further, the new variant of the covid is pushing multiple nations to cut off their UK travels. After countries from Europe and Turkey, Canada also recently banned flights from Britain.

Against this backdrop, Japan’s Nikkei 225 eases from record top to -0.65% whereas S&P 500 Futures seesaw around 3,700.

Moving on, risk catalysts are likely to keep the driver’s seat. Herein, the official announcement over the US aid package can offer an intermediate boost to the risks while further negatives from Brexit and virus front may keep the quote pressured.

Technical analysis

A one-week-old falling trend line neat 103.60 guards the pair’s immediate upside.