USDJPY gained on Thursday but has once again encountered a local resistance around 109.70. Today, the pair struggles to keep its upside momentum, trying to cling to the 109.50 area in order to avoid a deeper bearish correction. In general, the sentiment looks upbeat, mainly due to a better risk sentiment. At the same time, the 200-SMA in the weekly charts which comes around the above mentioned resistance caps the upside attempts.
Also, the yen derived support from the Bank of Japan summary of opinions of the December meeting which showed that monetary authorities are not eager to increase stimulus further and instead prefer to assess the side-effects of their policy while maintaining the current monetary easing. Also, in his latest comments, the Japanese Prime Minister Abe noted that moderate economic recovery continues.
Against this backdrop, USDJPY had to retreat from the important local highs but as long as the prices hold above 109.00, the upside risks prevail. The fact that investors in the stock markets remain bullish amid the renewed trade-related optimism, suggests that the safe-haven yen demand will likely remain subdued, at least until the US and China sign a partial deal. The ceremony is scheduled for January. In the near term, the dollar needs to firmly get back above the 109.50 area in order to challenge 109.70.
Also, the yen derived support from the Bank of Japan summary of opinions of the December meeting which showed that monetary authorities are not eager to increase stimulus further and instead prefer to assess the side-effects of their policy while maintaining the current monetary easing. Also, in his latest comments, the Japanese Prime Minister Abe noted that moderate economic recovery continues.
Against this backdrop, USDJPY had to retreat from the important local highs but as long as the prices hold above 109.00, the upside risks prevail. The fact that investors in the stock markets remain bullish amid the renewed trade-related optimism, suggests that the safe-haven yen demand will likely remain subdued, at least until the US and China sign a partial deal. The ceremony is scheduled for January. In the near term, the dollar needs to firmly get back above the 109.50 area in order to challenge 109.70.