USD/JPY recovers back over 106.50 after declining in early Monday action
- Japanese political tensions sapping risk appetite out of markets to kick off the new week.
- A thin week for economic data leaves majors exposed to market sentiment.
The USD/JPY is whipping in Monday's Tokyo session, dropping on political cronyism allegations but rebounding on leftover risk appetite from US Non-Farm Payrolls widely beating expectations on Friday. The pair is currently testing near 106.65 heading into the European market session.
Equities tumbled at the outset of the Tokyo trading session following revelations that documents were forged involving government land being sold to a school developer with ties to the Japanese Prime Minister's wife. The land was sold at a steep discount on the appraised value, and officials are confirming that key officials had a hand in striking names from sensitive documents that tied the Japanese government's leadership to the deal.
The political pressure is taking the top off equities and drying up risk appetite to kick off the week's trading, and risk aversion is driving traders back into the Yen, sending the USD/JPY lower heading into the new week.
A sparsely-populated macro calendar greets traders this week, and the next notable Japan data will be the Bank of Japan's Monetary Policy Meeting Minutes and Japanese Machine Orders figures for the month of February; both indicators drop at 23:50 GMT late Tuesday. The US side will be seeing February's Monthly Budget Statement, and market analysts are expecting a $222.6B deficit in government spending, a severe turnaround from the last period's $49B surplus.
USD/JPY Technicals
The USD/JPY has rebounded after tanking to kick off Tokyo's Monday trading, but the pair is noticeably on the bearish side heading into the European market session. The US Dollar is steeply bearish against the Yen on Daily candles, and the pair is struggling to find a foothold in H4 charts as consecutive lower highs continue to price in. Support is currently sitting at last week's swing lows at 105.60 and 105.25, with resistance at the last two weeks' swing highs at 107.05 and 107.65.