- USD/JPY skittish amidst recovery attempts
- Broad USD weakness
- US Factory data awaited
USD/JPY bulls could pull up the pair from the day’s low – 105.83 but are not able to gain further upside due to weak follow-through buying. This price action is in tandem with dollar weakness against other major currencies.
The cautious trading was seen in European equities and the fall in S&P 500 futures also added to the less cheerful mood for the greenback.
The dollar couldn’t gain much traction even after an upbeat US ISM Manufacturing PMI, probably weighed down by the Covid-19 resurgence.
More dollar supply came in as the US real yields fell further and the US fiscal stimulus deal became a near possibility.
Bank of Japan’s (BOJ) Governor Haruhiko Kuroda comments gained more attention than the country’s macro news, for Yen traders. He had said on early Tuesday that the central bank might consider extending the March 2021 deadline for lending facilities to companies adversely affected by the pandemic. Tokyo and the rest of Japan have seen rising new infections of Covid-19.
The USD/JPY will now await the US Factory Orders and virus data for immediate trading direction, along with sentiments on the global stocks and stimulus expectations.
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