Home Forex News USD/JPY Cautiously Bullish At Support Level

USD/JPY Cautiously Bullish At Support Level

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  • Japan Affirms Easing Programs
  • Japan economy contraction
  • Safe-Haven Demand

The Japanese Yen recouped some losses against the U.S Dollar, Wednesday morning, conversely sending the USD/JPY pair lower. The pair edged lower as Japan’s Chief Cabinet Secretary Yoshihide Suga reiterated further easing will continue as planned to address ongoing economic contraction.

Yen Weakness

The Yen has come under immense pressure in recent weeks as traders react to one of the biggest economic contraction in recent years. A surge in coronavirus infections in Tokyo has left the Yen vulnerable as traders rush to the U.S dollar as a safe-haven.

Time                            : 07-08-2020

Pivot                           : 107.61

Technical View           : Long Above 107.81

Target                         : 108.01 – 108.09 – 108.32

Comments                  : Weak Bearish to Neutral

Last Price                    : 107.53

Technical View           : Short below 107.41

Target                         : 107.21 – 107.12 – 106.93

Disappointing economic data has also continued to take a toll on the Yen sentiments in the market. Household spending has already contracted with overtime pay shrinking in June as the Japanese economy contracted amid COVID-19 disruptions.

Japan’s June’s Trade balance marked a reduction to ¥566.8 billion from ¥966.5 billion reported in May. The current account, on the other hand, surged past the ¥1088.2 billion marks with Bank lending slipping below 7.2% to 6.2% Year over year.

The uncertainty around Japan’s economy amid the COVID-19 pandemic continues to pile pressure on the Yen. Likewise, the USD/JPY pair has shown signs of breaking out, from the current 106.6 to 107.5 trading range.

U.S Dollar Strength

The greenback has continued to strengthen against other majors as traders remain wary of the potential impact of the second wave of coronavirus infections in the U.S. The U.S. reported record numbers in the first five days of the month with the World Health Organization warning that the number of deaths could start rising.

The risk of lockdowns, as seen in some states in the U.S, is becoming a big concern, something that could dampen economic recovery. Likewise, investors have started shunning riskier assets opting for safety in safe-havens such as the U.S dollar. With the U.S dollar strengthening across the board, the USD/JPY could edge higher after the recent pullback lower.

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