FxWirePro: USD/JPY Daily Outlook

Chart - Courtesy Trading View 

USD/JPY was trading 0.19% lower on the day at 141.86 at around 08:00 GMT.

Less-hawkish commentary from Fed policymakers has started weighing on US Treasury yields, 10-year US yields have slipped below 3.82%.

The pair has snapped a four-day bullish streak, but, previous week’s strong US Retail Sales and Producer Price Index (PPI) keep hope for upside.

Given that inflation is still well above the Fed’s 2% target, markets are also considering the possibility that the central bank will keep raising rates for much longer than expected.

Preliminary readings of the monthly US activity data and the Federal Open Market Committee (FOMC) Meeting Minutes due Wednesday will be crucial for further direction.

Monetary policy divergence between the US Federal Reserve (Fed) and the Bank of Japan (BOJ) joins the coronavirus woes to favour upside in the pair.

Technical bias for the pair is neutral with a bullish tilt. Price action has retraced above 200H MA. 5-DMA is biased higher.

After grinding sideways below 110-EMA, the major has shown a decisive break above. Scope for test of 21-EMA at 143.22.