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  • USD/JPY is currently trading at 111.65 vs a high of 111.69 and a low of 111.62 in Tokyo.
  • A more positive outlook could come on a break above 112.10.

 Markets were enjoying a good news story from the weekend relating to the Chinese economy where China’s strong industrial profits in March matched with strong credit growth helped lift global stocks, despite data misses in the EZ.  

USD/JPY rose from 111.60 to 111.90 overnight following a risk-on sentiment and higher yields which left US 10yr treasury yield rising  from 2.50% to 2.54% and the 2yr yield climbing  from 2.28% to 2.31%, despite subdued PCE inflation data – (The core PCE deflator was flat for the month and up just 1.6% over the last year against 1.7% expected).

As for the U.S. benchmarks, The Dow Jones Industrial Average (DJIA), added 11.06 points, or less than 0.1%, to end at 26,554.39, while the S&P 500 index climbed 3.15 points, or 0.1%, to 2,943.03, surpassing an intraday record of 2,940.91. The Nasdaq Composite Index added 15.46 points to 8,161.85, a gain of 0.2%.

  • When are Chinese PMIs and how could they affect the AUD/USD?

Looking ahead for the day, traders are getting set for further economic updates from the world’s second-largest economy:

“Be it official manufacturing and non-manufacturing gauges or Caixin manufacturing survey result, Chinese PMIs are set to take grab the spotlight on early Tuesday”.  

USD/JPY levels

Valeria Bednarik, Chief Analyst at FXStreet explained that the USD/JPY pair found buyers around a directionless 200 DMA for a third consecutive day, finishing it a couple of pips above an also flat 20 SMA. In the 4 hours chart, the pair has settled above all of its moving averages that anyway lack directional strength, while technical indicators turned flat after reaching their midlines, reflecting the absence of buying interest once the pair nears the critical 112.00 level. A more positive outlook could come on a break above 112.10, quite unlikely for the first half of the day.