USD/JPY continues to find decent support near 113.00 handle amid risk-on mood
• Global risk-on trade dampens JPY’s perceived safe-haven demand.
• Renewed USD selling bias fails to provide any meaningful impetus.
• Bulls seemed rather unimpressed by stronger core US PPI figures.
The USD/JPY pair has managed to recover a major part of its early losses, albeit struggled to gain any strong follow-through traction.
Some renewed US Dollar selling on Tuesday failed to assist the pair to build on the overnight goodish rebound from the very important 100-day SMA, rather prompted some profit-taking; though a combination of supporting factors helped form a firm base around the 113.00 handle.
A goodish pickup in the US Treasury bond yields and a strong rally across global equity markets, which tends to undermine the Japanese Yen's safe-haven demand turned out to be key factors that helped limit any deeper losses.
Market sentiment got a strong boost after China was reported to move on US car tariffs cut. According to a Bloomberg report, a proposal to reduce tariffs on cars made in the US to 15%, from the current 40%, has been submitted to China's Cabinet to be reviewed in the coming days.
Meanwhile, the USD bulls seemed rather unaffected by today's release of hotter than expected core PPI figures from the US, coming in to show that the price of finished goods and services sold by producers rose 0.3% m/m in November.
Technical levels to watch
Valeria Bednarik, FXStreet's own American Chief Analyst explains: “Given that the pair has bounced twice from its 100 DMA these last few days, now trading roughly 100 pips above it, the risk is skewed to the upside, toward the 114.00 price zone. Below 112.90, bulls will likely give up and a retest of the 112.20 comes back to play.”