USD/JPY: yen bulls trying to take control vs the grain, testing below 112.80
Currently, USD/JPY is trading at 112.79, down -0.03% on the day, having posted a daily high at 112.94 and low at 112.74.
Forex today: dollar and Wall Street fired up by risk appetite and return of the Trump-reflation trade
It was all about the dollar today and US stocks. Trump delivered the GOP's tax framework at a Rally in Indiana and as a result, markets were generally higher all around.
The optimism over fiscal progress with the corporate tax rate proposed at 20% from 35% listed spirits on Wall Street. Rates were higher in the US 10yr yields that rose from 2.24% to 2.31% to a two-month high and the Fed fund futures yields continued to price the chance of a December rate hike at 76%. The US dollar rose by 0.5% to a one-month high in the DXY as the reflationary Trump trade re-awakens.
- Wall Street extends gains on tax reform framework
- US Pres. Trump: Going to cut taxes for middle-class, make tax code fairer and simpler
- Overview of President Trump's tax proposal
- Fed's Bullard: Current level of policy rate is appropriate given current macroeconomic data
- US Durable Goods Orders: Positive momentum heading into year-end - Wells Fargo
For the day ahead, BOJ's Kuroda is set to speak at the National Securities Industry Convention. However, Valeria Bednarik, chief analyst at FXStreet noted that given that the Central Bank has maintained the status quo, seems unlikely he could affect the yen. "Equities and yields, therefore, will remain as the main market motors for yen crosses," she added.
USD/JPY levels
Technically, Valeria explained that pp for a second consecutive day, the pair maintains a positive tone short-term, although the upward momentum remains limited. "In the 4 hours chart, the price continues developing well above its 100 and 200 SMAs, while the Momentum indicator aims modestly higher within neutral territory, as the RSI indicator aims to recover ground, but remains below its daily low, currently at 62," Valeria added.