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USD/JPY intermarket: risk reverses and yen declines to 200 hourly sma

  • Yen is dumped as risk sentiment rallies.

Currently, USD/JPY is trading at 113.78, down -0.14% on the day, having posted a daily high at 114.04 and low at 113.40. There has been another turnaround in NY shift today with the yen back on the backfoot after outperforming most of the G10 currencies and ignoring dovish comments from BoJ board member Funo.

USD/JPY rallied from the aforementioned lows despite a soft dollar elsewhere. US stocks have bounced and gold has fallen back from the highs as risk sentiment improves towards the close of the session. US yields have also turned positive from lows of 2.3019% to 2.3253% recent highs.Gold fell from $1,287.46 down to $1,281.95. 

Current USD/JPY funda risk factors

Meanwhile, markets await updates on efforts to pass tax reform in Washington. These are scheduled for Thursday at 1130 am eastern time. Other risks come as President Donald Trump tours Asia, highlighting lingering tensions with North Korea in a speech yesterday in S. Korea.

USD/JPY levels

Analysts at Commerzbank explained that USD/JPY continues to probe the top of the range at 114.38/58 (May and July highs were made and the 2015-2017 downtrend) we will need a close above here to confirm the break higher. "However upside risks are growing longer term and while dips lower are contained by 112.03/111.75 (the 200 day ma and the 55 week ma) an upside bias will persist. A close above 114.58 will introduce scope to the 118.60/66 January high," the analysts at Commerzbank argues.

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