FXStreet (Mumbai) – The Japanese yen took a breather in its upsurge versus the US dollar in the early European trades, now lifting USD/JPY away from lows and back near 119 handle, as markets assess the recent Chinese trade data and further moves by the China’s authorities.
USD/JPY recovers from 118.86
Currently, the USD/JPY pair trades -0.20% lower at 119.03, retreating from session lows of 118.86. The USD/JPY pair pared losses, although remains heavy as the tumbling Chinese exports re-ignites concerns over the health of the Chinese economy, weighing on investors’ sentiment.
Moreover, the ongoing weakness in the Chinese indices also fuels risk-off sentiment across the board, boosting yen’s demand as a safety asset. The China benchmark index, SSEC now drops -2.04% to 3017 levels. Other Asian benchmarks also followed suit with the Nikkei tanking over 2%.
On the domestic macro front, Japan’s economy contracted a revised 0.3% in the April-June period, beating the initial estimate of a 0.4% contraction, but much softer than the 1.0% March-quarter expansion.
Later today, the major will be influenced by the risk-off/on sentiments as markets continue to digest the Chinese data, awaiting fresh cues from the week ahead as the US calendar remains fairly light today.
USD/JPY Technical levels to consider
To the upside, the next resistance is located 119.53 (Today’s High) levels and above which it could extend 120.19 (Sept 4 High) levels. To the downside immediate support might be located at 118.43 (Aug 26 Low) below that at 118 (Psychological Levels).
(Market News Provided by FXstreet)