- USD / JPY marks three consecutive days higher as the bulls attack the April high.
- Market sentiment wanes after Powell defends easy money as disputes between the United States and China intensify.
- The BOJ minutes cite the lack of agreement on the economic outlook, as Kuroda meets with the prime minister.
- The US PMI and various speeches from the Fed will be key along with the risk catalysts.
The pair USD / JPY follows broad US dollar rally while climbing near annual highs, trading at time of writing at 110.85, up 0.16% on the day at the start of the European session on Wednesday. The pair has recently benefited from the market re-evaluation of risk catalysts, not forgetting the Bank’s mixed updates. Japan (BoJ) and Tokyo data.
The Japan’s leading economic index for April rose above forecasts of 103.00 and 103.80 of the previous month, but the BOJ minutes, released earlier during the Asian session, reveal differences between those responsible of policy making on economic growth. Additionally, Jibun Bank’s preliminary manufacturing PMI reading for June came in at 51.5, below the market consensus of 52.3. Too this weakened the Japanese yen, favoring the USD / JPY bulls.
It is worth noting that the meeting of the BoJ governor, Haruhiko Kuroda, with the country’s prime minister, Yoshihide Suga, raised doubts about the economic strength, even as the BoJ president rejected such concerns or requests from the government.
Above all, a rebound in US Treasury yields following Fed Chairman Jerome Powell’s speech the day before, favors bulls del USD/JPY.
That said, stock market futures lack direction ahead of key US PMI figures.
USD / JPY Technical Analysis
A two-month uptrending channel keeps USD / JPY buyers hopeful as long as it remains above 109.60. However, the 111.00 level becomes a tough bone to break on the way up towards the March 2020 high near 111.70.
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