USD/JPY pulls back from six-week low, still below 107.00, amid US dollar recovery
- USD/JPY snaps five-day south-run as Tokyo open reacts to the fresh risk catalyst after Wednesday’s bank holiday.
- The latest Japanese economics fail to offer any major direction amid the broad risk-on.
- Upbeat developments on the coronavirus drug supersede disappointing US GDP, Fed’s dovish halt.
- US-China tussle also helping the USD to take the safe-haven bids.
USD/JPY takes the bids to 106.80, up 0.11% on a day, during the initial hour of Tokyo open on Thursday. While bouncing off the six-week low, also snapping the five-day losing streak, the yen pair portrays broad US dollar recovery amid mild risk-on sentiment. In doing so, the quote pays a little heed to Japan’s latest Retail Trade and Industrial Production figures.
Japan’s March month Retail Sales dropped a little less than 4.7% market consensus to -4.6% whereas Industrial Production also softened lesser compared to -5.2% forecast while flashing -3.7% contraction.
The reason for the pair’s recent run-up, despite better than forecast Japan data, could be traced from the broad US dollar pullback after US President Donald Trump raised doubts on the US-China trade deal.
The pair dropped to multi-day low during the late-US session on Wednesday after Gilead renewed hopes of a cure to the coronavirus (COVID-19), which in turn dimmed the US dollar’s safe-haven demand.
It should also be noted that Japanese PM Abe recently crossed wires while saying that the state of emergency declared (due to the virus outbreak) may persist beyond May 6 as the severe situation is continuing.
With the trade-tussle back in focus, coupled with the on-going attention on virus updates, the pair traders may have to concentrate more on the qualitative catalysts for near-term direction.
Technical analysis
Buyers will look for entries beyond a horizontal support line, now resistance, comprising the early-month lows, near 106.90, to target a three-week-old resistance line near 107.50. Until then, March 10 top surrounding 105.90 remains on the traders’ radars.