- USD/JPY steps back from weekly top, refreshes intraday low.
- US Treasury yields drop, stock futures dwindle as geopolitical headlines weigh on previous optimism.
- Japan Q3 GDP came in softer, Tankan Survey portrays optimism for December.
- Qualitative catalysts will be important for clear direction amid a lack of major data/events.
USD/JPY stays pressured around the daily bottom of 113.35 as markets in Tokyo open for Wednesday. In doing so, the yen pair declines for the first time in two days, down 0.05% of late, as fresh challenges to the sentiment weigh on US bond coupons.
Among the key-risk catalysts are the geopolitical tensions between Washington and Kremlin, as well as the US-China tussles. Adding to the sour sentiment could be the chatters surrounding the fears of Chinese real-estate companies’ default.
US President Joe Biden warns Russia of sanctions and would help Ukraine with military power if Kremlin invades Kyiv. “The Biden administration is in ‘intensive consultations’ with the new German government over its response if Russia invades Ukraine and believes Germany would be ready to take significant action if Russia launches an attack, a senior U.S. State Department official said on Tuesday,” said Reuters.
Further, the US boycott of the 2022 Beijing Olympics doesn’t bode well with China as the dragon nation hints at consequences due to the same. Additionally, the market’s optimism also fades amid doubts over China’s struggling real-estate firms’, Evergrande and Kaisa, capacity to pay the looming debt after barely paying the interests.
It’s worth noting that Japan’s optimism for more stimulus and receding fears of the South African coronavirus variant, dubbed as Omicron keep USD/JPY buyers hopeful. On the same line is China’s readiness for safeguarding the financial system from default and covid risks.
Talking about data, Japan’s Q3 GDP dropped below -0.8% initial forecast to -0.9% while Tankan Manufacturers’ survey for December was quite optimistic, citing manufacturers’ gauge refreshing four-month high.
While portraying the market mood, the US 10-year Treasury yield snaps a two-day uptrend around 1.47%, down two basis points (bp), whereas S&P 500 Futures struggle to follow its Wall Street benchmark that rallied the most since March.
Given the lack of interesting data/events on the calendar, risk-related headlines are important for the USD/JPY traders to watch for fresh impulse.
Technical analysis
Tuesday’s Doji below 20-DMA level of 113.95 directs USD/JPY towards the previous resistance line from March, around 112.60 at the latest.
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
Gold corrects from record high set at $3,500
Gold price pulls away from the record peak it set at $3,500 earlier in the day as buyers take a breather amid overbought conditions on short-term charts. Any meaningful corrective downfall, however, still seems elusive as US Dollar downtrend remains intact.
EUR/USD retreats below 1.1500 as US Dollar stabilizes
EUR/USD corrects lower following Monday's rally and trades below 1.1500 on Tuesday. The pair loses traction as the US Dollar finds its feet, even as investors remain wary of the US financial stability amid Trump's attacks on Fed Chair Powell. Speeches from ECB and Fed officials are on the radar.
GBP/USD stays below 1.3400 as USD selloff pauses
GBP/USD fluctuates in a tight range below 1.3400 on Tuesday as the modest recovery seen in the US Dollar caps the pair's upside. Nevertheless, the pair's further downside appears limited as fears of a US economic slowdown and concerns about the Fed's independence remain a headwind for the Greenback.
3% of Bitcoin supply in control of firms with BTC on balance sheets: The good, bad and ugly
Bitcoin disappointed traders with lackluster performance in 2025, hitting the $100,000 milestone and consolidating under the milestone thereafter. Bitcoin rallied past $88,000 early on Monday, the dominant token eyes the $90,000 level.
Five fundamentals for the week: Traders confront the trade war, important surveys, key Fed speech Premium
Will the US strike a trade deal with Japan? That would be positive progress. However, recent developments are not that positive, and there's only one certainty: headlines will dominate markets. Fresh US economic data is also of interest.
The Best brokers to trade EUR/USD
SPONSORED Discover the top brokers for trading EUR/USD in 2025. Our list features brokers with competitive spreads, fast execution, and powerful platforms. Whether you're a beginner or an expert, find the right partner to navigate the dynamic Forex market.