USD/JPY bulls struggle to make it through 109.00 handle, FOMC minutes eyed for fresh impetus
• The prevalent risk-on mood continues to dent JPY’s safe-haven status.
• Upbeat Japanese wage growth data keeps a lid on any runaway rally.
• Subdued USD price action further collaborates towards capping gains.
The USD/JPY pair traded with a mildly positive bias through the Asian session on Wednesday, albeit bulls still seemed struggling to build on the momentum beyond the 109.00 handle.
After yesterday's directionless price action, the latest optimism over the progress in US-China trade talks continued denting the Japanese Yen's safe-haven status and extended some support to the major.
However, better than expected Japanese wage growth data, coming in to show a 2% y/y rise as against 1.2% anticipated, helped offset the negative factors and kept a lid on any runaway rally.
Adding to this, lack of any strong follow-through US Dollar buying, amid growing expectations that the Fed will slow the pace, or perhaps even pause its policy tightening cycle in 2019, kept a lid on any meaningful up-move.
Hence, today's release of the latest FOMC meeting minutes will play an important role in driving the near-term sentiment surrounding the greenback and eventually provide some fresh directional impetus.
Ahead of the key event risk, scheduled speeches by Chicago Fed President Charles Evans and Boston Fed President Eric Rosengren might produce some short-term trading opportunities during the early North-American session.
Technical levels to watch
On a sustained move beyond the 109.00-109.10 region, a bout of short-covering now seems to accelerate the momentum towards 109.65 intermediate hurdle en-route the key 110.00 psychological mark.
On the flip side, the 108.50-45 region now seems to have emerged as immediate support, which if broken might turn the pair vulnerable to break through the 108.00 handle and test its next support near the 107.65 area.