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  • USD/JPY extends recovery moves from an intraday low of 107.45.
  • S&P 500 Futures, Nikkei 225 and the US 10-year Treasury yields print mild gains.
  • Coronavirus worries, global ire against China remain on the table.
  • US ISM Non-Manufacturing PMI, risk catalysts will be in focus.

USD/JPY rises to 107.64, up 0.11% on a day, as Tokyo open welcomes risk-on mood On Monday. The pair initially ticked down from 107.51 to 107.45 during the early hours in Asia. However, the following run-up attacks Thursday’s top near 107.75.

Bond yields, equities gain despite pandemic worries…

Be it the US 10-year Treasury yields’ positive opening around 0.68% or 0.28% gains, to 3,138, by the S&P 500 Futures, global markets remain positive at the week’s start. Also portraying the mild optimism in trading sentiment could be Japan’s Nikkei 225 that rises 0.50% to 22,416 as we write.

US President Donald Trump’s tweet defies the surge in the coronavirus (COVID-19) numbers in the world’s largest economy. As per the latest data, America continues to break the record high numbers with above 50,000 figures since the start of the month. Also, numbers from the epicenter Texas and Florida suggest that the situation is worrisome.

Also on the negative side are the updates signaling an escalation of the Sino-American tension. The reason could be traced from the White House diplomats’ hint and the US aircraft aiming for an exercise in the South China Sea. It should, however, be noted that US President Trump hasn’t yet okayed sanctions on Beijing policymakers involved in the passage of the Hong Kong security law, which in turn could recede the tension between the world’s two largest economies.

Talking about the reasons for the latest risk reset, markets might be preparing for the US open after Friday’s close due to the Independence Day. Additionally, hopes of further stimulus from the global policymakers also support the risks.

With the economic calendar in Asia being lighter, US ISM Non-Manufacturing PMI, expected 49.5 versus 45.4 prior, will be the key to watch during the day. Though, updates concerning the virus and the US-China tussle shouldn’t be ignored ever.

Technical analysis

Unless closing below 50-day SMA near 107.40, USD/JPY is less likely to reverse from its path directing towards 108.00.