English
USD/JPY looks to approach 140.00 as risk-off sentiment recovers and Fed Powell's speech is anticipated
The USD/JPY exchange rate is approaching 140.00 as China's anti-Covid shutdown fears have sparked a negative attitude. Individuals in China are protesting for democracy against dictatorship. Fed Powell's speech will clarify rumors regarding the December meeting's interest rate decision. The employment and Retail Trade figures of Japan will remain a focal point.
After hitting the 139.00 support level in the early Tokyo session, the USD/JPY pair has detected a good amount of buying interest. As a result of the growing civil concerns in China, the asset is seeking to continue its recovery towards the round-level resistance level of 140.00.
Individuals are chanting "XI Jinping Must Resign" as a result of the public's frustration with the Chinese government's stringent Covid-19 restrictions. Covid-19 cases in China reached an all-time high of around 40,000 on November 26; hence, the administration is obligated to maintain the zero-Covid policy.
The escalation of anti-Covid demonstrations has generated the possibility of an economic downturn and a further threat to the already shaky real estate market. In addition, the risk-aversion theme has been bolstered by the call for democracy, rather than tyranny, from China's angry and frustrated citizens in response to the Covid-19 restrictions.
The US Dollar Index (DXY) has continued its recovery to around 106.32 and is expected to maintain its strength. Futures on the S&P 500 have declined in Tokyo, demonstrating a risk-aversion impulse. In the meantime, 10-year US Treasury yields remain unchanged at 3.70 percent in advance of a speech by Federal Reserve (Fed) chair Jerome Powell.
The Fed Chair's speech will provide light on rumors around the conclusion of the 75 basis point (bps) rate rise framework. As United States inflation has exhibited considerable tiredness in its October report, Fed policymakers have vouched for a ‘less-hawkish’ posture in December monetary policy meeting by the Fed.
On the Tokyo front, investors are refocusing their attention on Tuesday's jobs report. The Unemployment Rate is anticipated to fall to 2.5% from 2.6% previously. Also, the ratio of jobs to applicants is anticipated to improve.
In addition, Retail Trade statistics will remain a focal point. Annual economic data are anticipated to increase by 5.0%, however monthly data may indicate a decline of 0.3%.
Bonus rebate to help investors grow in the trading world!
