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USD/JPY fades a spike to 110.80, focus on US data

12/28/2018, 6:13:26 PMTrading Strategies
USD/JPY fades a spike to 110.80, focus on US data

The USD/JPY pair extends its overnight descent in the Asian trading and tested the 110.50 level, with supply capping the recovery attempts near 110.85 region. 

Despite moderate risk-on sentiment prevalent across the financial markets in Asia, as reflected by the oil-price rebound, a rally in Treasury yields and mostly higher Asian equities, the spot remains exposed to downside risks amid a broadly weaker US dollar.

The US dollar index drops -0.16% to fresh five-day lows of 96.33, as the sentiment remains weighed down by the US political risks, in light of the partial US government shutdown and President Trump’s criticism of the Fed.

Meanwhile, the year-end flows in the Yen keep the safe-haven buoyed, as markets shrug-off downbeat Japanese CPI and industrial output data released earlier today. Also, the Bank of Japan (BoJ) Summary of Opinions (December) also had little impact on the Yen markets.

The focus now shifts towards the US macro updates due later in the NA session for fresh trading incentives. The US pending homes sales and new home sales data will be published among other minority reports.