USD/JPY stays on the back foot around 108.60, shrugs off upbeat Japan Q3 GDP
- USD/JPY stays modestly changed to Friday’s levels.
- Japan's final reading of Q3 GDP crosses preliminary readings and forecasts.
- Risk sentiment remains under pressure at the start of the key week including ECB, FOMC, US tariffs, and UK election.
USD/JPY seesaws around 108.60 during the Asian session on Monday. The quote shows a less reaction to upbeat growth figures from Japan. Even so, pair’s sellers keep dominating the moves ahead of the key week.
The final reading of Japan’s third-quarter (Q3) Gross Domestic Product (GDP) grew past-0.2% forecast and 0.1% preliminary expectations to +0.4% on QoQ basis. Though, the yearly figures matched no change expectations of 0.6%. Further, Japan’s Trade Balance on Balance of Payment (BOP) Basis for October crossed ¥1.1 B prior with a whooping ¥254 B.
Market’s risk tone seems to fail to extend the previous gains as traders turn cautious ahead of the key week that comprises key central bank meetings and the general election in the United Kingdom (UK). Though, recent polls concerning the British election seem to keep the ruling Conservatives Party at the top and recede fears of the UK’s political trauma.
Also exerting the downside pressure on risk sentiment is the trade tussle between the United States (US) and China. The US tariffs of China are up for taking place on December 15 and the Trump administration wants a phase-one to turn the tariff’s switch off. However, Beijing seems not in a mood to respect the US, despite supporting agricultural demand, as recent headlines from the Financial Times (FT) and Global Times have been quite downbeat.
As a result, the S&P 500 Futures fails to extend the Friday’s recovery while taking rounds to 3,145 whereas the US 10-year Treasury yields also seesaw near 1.84% and stop the latest run-up.
Given the lack of major data/events up for publishing, traders may look for trade/political headlines for fresh impulse.
Technical Analysis
50-day Simple Moving Average (SMA) level of 108.55 offers the immediate support ahead of November month low near 108.20. On the upside, 109.00 acts as nearby resistance whereas 109.70 and 110.00 will be on the Bull’s radar then after.