USD/JPY accelerates declines to 105.70 on Kuroda speech
- BoJ Kuroda’s comments on policy exit boost Yen further.
- DXY weakness amid subdued T-yields adds to the declines.
- Risk-trends to drive the Yen markets amid trade war fears.
The USD/JPY pair failed recovery attempts near 106.15 levels, now sending the rates back below the 106 handle in a bid to print fresh two-week lows of 105.71.
USD/JPY looks to test multi-month lows of 105.53
The spot extends its sell-off into a third day today, as the demand for the safe-haven Yen remains in vogue amid intensifying risk-off trades, fuelled by growing fears of a trade war, especially after the US announced the imposition of tariffs on steel and aluminum imports.
The latest leg lower in the major can be mainly attributed to resurgent Yen buying across the board, following a hawkish twist delivered by the BoJ Governor Kuroda in his speech. Kuroda noted that the central bank will be considering policy exit around the fiscal year 2019.
Meanwhile, the Japanese currency also received a fresh boost from the outcome of the latest Reuters poll of economists, which see an upward revision to the Japanese Q4 2017 GDP figures. Also, broad-based US dollar weakness adds to the weight on the pair.
Next of relevance for the pair remains the US revised consumer sentiment data due later in the NA session. In the meantime, the USD dynamics and risk flows will continue to drive the sentiment around the USD/JPY pair.
USD/JPY levels to watch
The AceTrader Research Team, notes: “Yesterday's break of last week's 106.38 low (now res) and then daily close below there suggests correction from February's fresh 15-month bottom has ended and price is en route to re-test this level, possibly in New York trading later today, then towards next chart obj. at 105.00 (there is rumor of option defense at this 'psychological level). Therefore, selling dlr on recovery is the way to go due to yen buying on risk aversion in reaction to market jitters of a global trade war following Trump's action. Offers are tipped at 106.20/30 n more above with stops above 106.55/60.
Some bids are noted at 105.95/90 with stops building below 105.50.”