- The risk-off sentiment undervalued JPY's safe-haven appeal.
- USD/JPY weighed heavily on the back of Japan's real wages decline, report.
- The pair look for impetus from US CPI amid a light economic calendar.
USD/JPY is trading under the 113.00 mark during early Asian session hours on Wednesday. The pair pushed lower alongside commodity currencies as risk appetite reversed overnight. As of now, a tight currency range is expected in the near term as markets look ahead to US CPI.
After falling from the 114.00 level, Japan's Current Account balance shrank below the ¥1060B forecast to ¥1033.7B in September, which weighed on the USD/JPY prices.
Also, in the news, Japan being the world's third-largest economy hit hard by the coronavirus pandemic, Prime Minister Fumio Kishida is set to map out and secure funding for a stimulus package worth more than 30 trillion yen ($265 billion) within the year.
It is to be noted that Reuters reported that "Japan's real wages declined in September for the first time in three months as inflation picked up faster than growth in nominal pay, the government said''. The news agency said that this is a sign of global cost-push inflation starting to affect Japanese households. This information has weighed heavy on the quote's price action.
Meanwhile, the US dollar index is moving below 94.00, down by 0.09% on the day. Treasury yields fell across the curve as markets digested news that dovish Fed Governor Lael Brainard has been interviewed for the Fed's chair position. This should see local rates markets open to a bid tone.
Amid a light economic docket in Japan, the pair will find impetus from the critical US inflation figures.
Technical levels
The USD/JPY daily chart indicates 113.76, 21-day Simple Moving Average (SMA), as immediate resistance to the upside. If it's breached, the pair's one-week high of 114.44 will be the next topside barrier. The next resistance would be one month's high at 114.70.
The price may reverse and continue the downtrend towards the support levels of 111.96, 110.03 and 109.78, which are the pair's 50, 100 and 200-day SMAs respectively. Following the Moving Average Convergence Divergence (MACD), the movement shows a cautious dive. The Relative Strength Index (RSI) looks cheerful but manages to stay below the 50-line horizon.
Note: All information on this page is subject to change. The use of this website constitutes acceptance of our user agreement. Please read our privacy policy and legal disclaimer. Opinions expressed at FXstreet.com are those of the individual authors and do not necessarily represent the opinion of FXstreet.com or its management. Risk Disclosure: Trading foreign exchange on margin carries a high level of risk, and may not be suitable for all investors. The high degree of leverage can work against you as well as for you. Before deciding to invest in foreign exchange you should carefully consider your investment objectives, level of experience, and risk appetite. The possibility exists that you could sustain a loss of some or all of your initial investment and therefore you should not invest money that you cannot afford to lose. You should be aware of all the risks associated with foreign exchange trading, and seek advice from an independent financial advisor if you have any doubts.
Recommended content
Editors’ Picks
EUR/USD stays in positive territory above 1.0850 after US data
![EUR/USD stays in positive territory above 1.0850 after US data](https://editorial.fxstreet.com/images/Markets/Currencies/Majors/EURUSD/money-euro-and-dollar-banknotes-17371247_XtraSmall.jpg)
EUR/USD clings to modest daily gains above 1.0850 in the second half of the day on Friday. The improving risk mood makes it difficult for the US Dollar to hold its ground after PCE inflation data, helping the pair edge higher ahead of the weekend.
GBP/USD stabilizes above 1.2850 as risk mood improves
![GBP/USD stabilizes above 1.2850 as risk mood improves](https://editorial.fxstreet.com/images/Markets/Currencies/Majors/GBPUSD/strong-pound-weak-dollar-17536259_XtraSmall.jpg)
GBP/USD maintains recovery momentum and fluctuates above 1.2850 in the American session on Friday. The positive shift seen in risk mood doesn't allow the US Dollar to preserve its strength and supports the pair.
Gold rebounds above $2,380 as US yields stretch lower
![Gold rebounds above $2,380 as US yields stretch lower](https://editorial.fxstreet.com/images/Markets/Commodities/Metals/Gold/gold-gm187363896-28836378_XtraSmall.jpg)
Following a quiet European session, Gold gathers bullish momentum and trades decisively higher on the day above $2,380. The benchmark 10-year US Treasury bond yield loses more than 1% on the day after US PCE inflation data, fuelling XAU/USD's upside.
Avalanche price sets for a rally following retest of key support level
![Avalanche price sets for a rally following retest of key support level](https://editorial.fxstreet.com/images/Avalanche/Avalanche_XtraSmall.jpg)
Avalanche (AVAX) price bounced off the $26.34 support level to trade at $27.95 as of Friday. Growing on-chain development activity indicates a potential bullish move in the coming days.
The election, Trump's Dollar policy, and the future of the Yen
![The election, Trump's Dollar policy, and the future of the Yen](https://editorial.fxstreet.com/images/Macroeconomics/Events/US%20Elections/Donald_Trump_closeup_XtraSmall.jpg)
After an assassination attempt on former President Donald Trump and drop out of President Biden, Kamala Harris has been endorsed as the Democratic candidate to compete against Trump in the upcoming November US presidential election.