FxWirePro: USD/JPY rangebound, Japan’s strong Tankan survey data dampens upside

USD/JPY chart - Trading View 

USD/JPY was trading marginally higher on the day at 110.76 at around 06:00 GMT. Outlook is bullish.

Japan’s strong Tankan survey figures for Q1 2021 and risk-off mood buoy JPY, dent upside in the pair.

The latest survey by Bank of Japan (BOJ) showed on Thursday that sentiment amongst Japanese manufacturing and services firms improved to pre-pandemic levels in Q1. 

The headline index for big manufacturers’ sentiment rose to plus 5 in March from minus 10 in December.

It was the third straight quarter of improvement and the index hit the highest level since September 2019.

Big non-manufacturers sentiment improved to -1 in the March survey from - 5 in December. Big firms expect to increase capital expenditure by 3.0% in the year, compared with a median forecast for a 1.4% increase.

Technical bias for the pair is bullish, price action is extending gains above 200W MA and has broken above major trendline resistance at 110.50.

Volatility is high and rising and momentum is strong bullish. Scope for test of March 2020 high at 111.71. Failure to close above 110.50 will see some sideways consolidation.