FXStreet (Mumbai) – The rally in the Japanese currency seems to have lost steam in the mid-Asian session, as the Asian indices are seen recovering early losses amid easing risk-off moods, now lifting USD/JPY to fresh session highs near 120.50 levels.
USD/JPY back above 120
Currently, the USD/JPY pair trades -0.07% lower at 120.43, bottoming out just below 120 marker. The major trimmed losses and bounced-off a brief dip below 120 handle as impressive Chinese CPI figures restored confidence among markets that Chinese government’s efforts to boost the economy are finally paying-off, thus cooling-off risk-aversion experienced during Wall Street overnight and early Asian hours.
China’s CPI rose 2.0% year-on-year in August, the fastest pace in a year, and beating the market forecast of a 1.9% rise. Pork prices were the main positive contributor to the CPI last month, surging 19.6% year-on-year in August.
Moreover, with most Asian indices trimming their losses at open also fades the persisting risk-off sentiment, resulting in diminishing bids for the safe-haven yen. The Japan’s benchmark, the Nikkei, now loses -2.85% versus -3.20% at open, while the closely monitored Shanghai composite index (SSEC) trades -1%, recovering from a more than 3% drop in early dealings.
Later today, the major will be influenced by the risk-off/on sentiments while the moves on the European and US equities will also be tracked for further momentum. On the data space, weekly jobless claims will fill in an otherwise data-dry US calendar tonight.
USD/JPY Technical levels to consider
To the upside, the next resistance is located 120.70 (Sept 3 High) levels and above which it could extend 121 (Psychological Levels). To the downside immediate support might be located at 119.98 (Today’s Low) below that at 119.62 (Sept 3 Low).
(Market News Provided by FXstreet)