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Tokyo Participants Look To Equity Rally

JPY

USD/JPY has unwound the modest pressure that crept in during late NY dealing after Fed Chair Powell pointed to the risks provided by the Omicron COVID variant re: the economy and inflation, including downside risks to progress in the labour market. Powell did not comment directly on the pace of Fed tapering in the pre-release ahead of his testimony on the Hill due Tuesday.

  • The cross last deals ~25 pips higher on the day, just shy of Y113.80 after the rate dealt in a near 1 figure wide range on Monday, unwinding a portion of Friday’s sell off. It would seem that Asia-Pac participants are looking to the uptick in equity indices/lesser sense of outright immediate worry re: the severity of Omicron, given that U.S. Tsys retraced from their highest levels on Monday.
  • Initial resistance is now located at the 20-day EMA, while support comes in at the Nov 9 low and reversal trigger (Y112.73).
  • Labour market data and preliminary industrial production headline the local Japanese docket today, although the official Chinese PMI readings headline the broader risk docket during Tokyo hours.
MNI London Bureau | +44 0203-865-3809 | anthony.barton@marketnews.com
MNI London Bureau | +44 0203-865-3809 | anthony.barton@marketnews.com

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