USD/JPY: Taking on the Bears on 113 Handle
USD/JPY, popping higher in the Tokyo open, was making a modest attempt towards the 113.00 level earlier, recovering from the 112.35 lows and making further gains on the week on the back of hawkish rhetoric from FED's members, reversing the dovish outcome of the last FOMC.
Analysts at Bank of Tokyo Mitsubishi note that USD/JPY has dropped by JPY 7-8 from JPY120 to JPY112-113 so far in 1Q. "Seasonal factors exports and cash repatriation have supported the JPY appreciation, shifting the direction of USD/JPY from the JPY depreciation," adding, "Exporters will likely sell USD/JPY to cover their real demand ahead of the fiscal year-end. Foreign asset buying by Japanese investors always pick up early in the next fiscal year, so should be watched."
Data just ahead of the Tokyo open showed the core inflation is looking stronger, ( National CPI excluding Food, Energy y/y for February arrived 0.8%
and as expected 0.8% but stronger than previous of 0.7%), but inflation overall is subdued and far from BOJ targets still. We will soon turn heads to the US GDP today, then PCE on Monday ahead of nonfarm payrolls in April as the key even for next week.
USD/JPY levels
Valeria Bednarik, chief analyst at FXStreet explained that in the 4-hours chart, "The 100 SMA has rejected advances already twice and is currently at 112.95 acting as an immediate resistance, while the technical indicators present tepid bullish slopes within bullish territory, indicating the pair may attempt once again to break above the critical psychological figure." A break of said resistance opens R2 at 113.26 and R3 at 113.60. On the flip side, the pivot stands at 112.47 with S1 at 112.03 and S2 is located at 111.69.
(Market News Provided by FXstreet)
