USD/JPY weaker, wobbling around 110.00
The Japanese yen is appreciating vs. its American counterpart today, sending USD/JPY to as low as the 109.70 area, although regaining the 110 neighbourhood afterwards.
USD/JPY lower on sales tax hike delay
Spot has quickly gathered downside pressure after Japan’s PM S.Abe confirmed the sales tax hike has been delayed 2.5 years, taking the broader fiscal reform to the passenger’s seat for the time being.
JPY has thus intensified its leg lower from recent fresh May highs in the 111.40 area, boosted by rumours on the likeliness of FX intervention by the BoJ and the already materialized delay in the implementation of the sales tax hike.
Ahead in the session, USD will take centre stage in light of the release of the ISM Manufacturing, Markit’s PMI and the Fed’s Beige Book. In Japan, the manufacturing PMI has come in at 47.7 in May, a tad higher than consensus.
USD/JPY levels to watch
As of writing the pair is losing 0.51% at 110.13 facing the immediate support at 109.66 (low Jun.1) ahead of 109.39 (20-day sma) and then 105.52 (2016 low May 3). On the other hand, a breakout of 111.45 (high May 30) would open the door to 111.92 (high Apr.28) and finally 112.33 (100-day sma).
