- USD/JPY extends the previous day’s losses, remains depressed around intraday low.
- Anxiety over Russia-Ukraine issue, Fed’s next move weighs on risk appetite.
- Yields drop after a lackluster performance, stock futures and Nikki 225 also decline.
- Japan’s trade deficit rose to largest since January 2014, second-tier US will decorate calendar.
USD/JPY takes offers to refresh intraday low near 115.30 amid fragile risk profile as Tokyo opens for Thursday.
The yen pair dropped the previous day as the market’s indecision over the US Federal Reserve’s (Fed) next move, as well as lack of clarity on the de-escalation of the Russia-Ukraine tensions. It’s worth noting that the latest Japan trade numbers failed to weigh on the JPY due to its safe-haven appeal.
That said, Japan’s Merchandise Trade Balance Total dropped to the eight-year low in January 2022 to ¥-2191.1B versus ¥-1607B expected and ¥-583.3B prior. Also important to note was the fact highlighted by Reuters that Japan January shipments to China post y/y drop for the first time in 19 months.
It’s worth noting that yields on 20-year Japanese Govt Bond (JGB) rose to a new high since February 2017, at 0.72% by the press time, whereas the US 10-year Treasury yields also dropped 2.3 basis points (bps) to 2.024% at the latest. Also portraying the risk-off mood are the downbeat prints of Japan’s Nikkei 225 index and S&P 500 Futures, down 0.45% and 0.25% at the latest.
The main catalyst behind the moves are headlines from Russia as recently softer comments from Moscow fail to convince the West and some of the Ukrainian sources as they reject the Russian troops’ retreat. On the other hand, the latest update suggests that Russia moves more military battalions towards the area near Ukraine and has also built a road and working on a bridge to soften the transport.
On the other hand, the Federal Open Market Committee (FOMC) Minutes also showed the hawkish concerns among the board members even if marking no strong support for a 0.50% rate hike in March.
That said, US Retail Sales and Industrial Production rose notably beyond the market forecasts and previous readouts with the latest MoM figures of 3.8% and 1.4% respectively in January.
Looking forward, risk catalysts are the key to keeping USD/JPY bears hopeful while the second-tier US economics, mainly the housing market numbers, jobless claims and Philadelphia Fed Manufacturing Survey, may entertain traders.
Technical analysis
Unless breaking a three-week-old ascending support line, currently around 115.20, USD/JPY bears remain challenged. On the contrary, the double tops surrounding 116.30-35 become the key hurdle for the yen pair buyers to watch during the recovery moves.
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.
The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.
Recommended content
Editors’ Picks
AUD/USD: The hunt for the 0.7000 hurdle
AUD/USD quickly left behind Wednesday’s strong pullback and rose markedly past the 0.6900 barrier on Thursday, boosted by news of fresh stimulus in China as well as renewed weakness in the US Dollar.
EUR/USD refocuses its attention to 1.1200 and above
Rising appetite for the risk-associated assets, the offered stance in the Greenback and Chinese stimulus all contributed to the resurgence of the upside momentum in EUR/USD, which managed to retest the 1.1190 zone on Thursday.
Gold holding at higher ground at around $2,670
Gold breaks to new high of $2,673 on Thursday. Falling interest rates globally, intensifying geopolitical conflicts and heightened Fed easing bets are the main factors.
Bitcoin displays bullish signals amid supportive macroeconomic developments and growing institutional demand
Bitcoin (BTC) trades slightly up, around $64,000 on Thursday, following a rejection from the upper consolidation level of $64,700 the previous day. BTC’s price has been consolidating between $62,000 and $64,700 for the past week.
RBA widely expected to keep key interest rate unchanged amid persisting price pressures
The Reserve Bank of Australia is likely to continue bucking the trend adopted by major central banks of the dovish policy pivot, opting to maintain the policy for the seventh consecutive meeting on Tuesday.
Five best Forex brokers in 2024
VERIFIED Choosing the best Forex broker in 2024 requires careful consideration of certain essential factors. With the wide array of options available, it is crucial to find a broker that aligns with your trading style, experience level, and financial goals.