USD/JPY extends three-day uptrend towards 105.00 as Japan’s emergency battles US stimulus/vaccine hopes
- USD/JPY takes the bids near intraday high, eyes levels marked on Tuesday.
- Japan keeps state of emergency for 10 regions amid no sign of reduction in elderly inflections.
- Stimulus talks gain momentum as US President Biden will meet bipartisan group, Pelosi eyes the package by February’s end.
- Downbeat US data, upbeat Foreign Investment in Japanese Stocks and virus/vaccine headlines add to the market’s liquidity.
USD/JPY bulls attack intraday high of 104.80 amid the initial hours of Tokyo session on Friday. Japanese traders couldn’t gain a good welcome after Thursday’s off as coronavirus (COVID-19) worries pushed the Asian major to extend activity restrictions. Also favoring the pair’s run-up are the hopes of US President Joe Biden’s covid relief plan and vaccine optimism.
Japan’s Economy Minister Yasutoshi Nishimura crossed wires, via Reuters, while conveying the strain on the Japanese medical system as well as sustained strength in the elderly infections. Following that, the policymaker also announced that the government keeps the state of emergency for 10 regions.
On the other hand, US President Biden showed concern for the covid vaccine while conveying extra jabs’ arrival. Further, Biden’s bipartisan stimulus talks are also progressing and he’s up for meeting Republicans to prove House Speaker Nancy Pelosi right over the February deadline.
Against this backdrop, the risk barometer struggle for a clear direction amid the off in China. That said, S&P 500 Futures drop 0.18% by press time whereas Japan’s Nikkei 225 drops 0.44%.
Talking about the data, US weekly Jobless Claims rose for the period ended on February 05 whereas Foreign Investment in Japanese Stocks also rose for the said period.
Looking forward, US Michigan Consumer Sentiment will decorate the calendar whereas risk catalysts can keep the driver’s seat. It should be noted that the recent recovery in risks may be thwarted if virus woes escalate in Japan, which in turn could weigh on USD/JPY.
Technical analysis
Sustained bounce off 100-day SMA, at 104.40 now, keeps USD/JPY bulls hopeful to refresh monthly high of 105.76.