- USD/JPY struggles to extend the previous day’s positive momentum.
- Headlines concerning the coronavirus cure keeps the lid on trading sentiment.
- US-Sino, Aussie-China tussles offer background noise.
- Second-tier Japanese data, Powell’s testimony to occupy calendar, virus/trade updates are also worth watching.
USD/JPY remains modestly changed around 107.30 during the initial hour of Tokyo open on Tuesday. In doing so, the pair fails to stretch Monday’s risk-on sentiment while taking clues from the latest Aussie-China tussle.
Following Moderna’s success during initial trials for the coronavirus (COVID-19) drug, US President Donald Trump’s comments that he has been taking the pill and has tested negative on virus checks strengthen the market’s optimism surrounding the virus cure.
It should also be noted that China’s Global Times also said, “A team from Beijing Advanced Innovation Center for Genomics successfully identified potent neutralizing antibodies against SARS-CoV-2 by high-throughput single-cell sequencing of convalescent patients’ B cells.
On the contrary, the dragon nation’s 80% tariffs on Australian barley, as well as the US-China tussle, seem to cap the market’s upbeat trading sentiment.
Also read: Aso: Japan Jan-March GDP reflected severe economic conditions
Amid all these catalysts, US 10-year Treasury yields drop 2.3 basis points (bps) to 0.72% whereas Japan’s NIKKEI rise 2.23% on a day to 20,588 by the press time.
Traders may now consider waiting for Japan’s April month Industrial Production, expected to remain unchanged at -5.2% YoY and -3.7% MoM respectively, for the immediate direction.
Even so, the major attention will be given to trade/virus updates ahead of Federal Reserve Chairman Jerome Powell’s testimony at 14:00 GMT.
Technical analysis
An eight-day-old rising trend line, at 107.10 now, restricts the pair’s immediate upside ahead of 107.00 round-figure whereas 50-day EMA near 107.65 seems to be the nearby resistance to watch.
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