- USD/JPY consolidates as markets weigh getting back to work vs the spread of COVID-19.
- Markets will now tune into deteriorating economic data.
USD/JPY is on the bid in Tokyo to a key resistance target in the 107.80s, extending its opening bullish trajectory, +0.22% at the time of writing having travelled from a low of 107.47 to a high of 107.76. USD/JPY has been consolidating over recent sessions as the US dollar ebbs and flows and sentiment surrounding COVID-19 flips on each conflicting headline.
The greenback has dominated the FX space of late having dropped from the 103 highs in the DXY to test the 98 handle before gaining positive traction again and running into resistance as markets look to a light at the end of the COVID-19 tunnel.
We have seen a positive reaction in equities to the prospects of nations getting back to work as the cases of the spread slow and economies need businesses to get back to work. US President Donald Trump also has announced promising test results of a cure for COVID-19.
Meanwhile, Japan March exports logged the biggest year-on-year decline since July 2016, and w are likely to see more terrible data over the coming weeks as the lockdown starts to kick in:
The Ministry of Finance official explained that the global spread of the coronavirus outbreak likely affected japan’s exports and imports, closely watching developments. Japan’s exports fell 11.7% in March from a year earlier, the Ministry of Finance (MOF) data showed on Monday.
- That compared with a 10.1% decrease expected by economists in a Reuters poll and followed a 1.0% fall in February.
- Imports fell 5.0% in the year to March, versus the median estimate for a 9.8% decline, and a 13.9% drop in the prior month.
- The trade balance came to a surplus of 4.9 billion yen, versus the median estimate for a 420.0 billion yen surplus.