- USD/JPY bounces off seven-day low to print mild intraday gains.
- UK Defense Chief believes that Russia could “turn up the violence”, Japan PM Kishida said that China-Russia increasing military collaboration.
- US jobs report, Fed’s Evans also favor the bulls amid sluggish session.
USD/JPY consolidates recent losses around 115.00 as risk-off mood underpins the US dollar’s safe-haven demand during Monday’s Asian session. The risk-barometer pair also gets weighed by the hawkish comments from Fed policymakers and strong US jobs report.
An ongoing Russian invasion shows the failure of the Kyiv-Moscow peace talks as Russian President Vladimir Putin sounds determined to fight until winning over Ukraine. The speculations gain support from the latest comments of UK Defense Chief Admiral Sir Tony Radakin, shared by The Times. The news mentioned that Russia’s lead forces have been “decimated” and it is not inevitable that it will succeed in taking over Ukraine. However, the Defense Chief also believed, per the news, “Russia could ‘turn up the violence’ with ‘more indiscriminate killing and more indiscriminate violence’ in response to resistance.”
On the same line were comments from Japan Prime Minister Fumio Kishida who said, “China and Russia are increasing their military collaboration.”
It should be noted that the US jobs report on Friday came in too strong for February and Fed’s Evans spread hawkish words before the Fed’s silent period began. That said, the headline Nonfarm Payrolls (NFP) rose by 678K, well above the median forecast of a 400K figure and upwardly revised 484K prior. On the same line, the Unemployment Rate dropped to 3.8% versus 4.0% previous readings and 3.9% expected.
Elsewhere, Fed’s Evans said, “The U.S. central bank is on track to raising rates this year, though it may be ‘more than I think is essential to do so at every policy-setting meeting.”
While portraying the risk-off mood, Wall Street closed in the red and the US 10-year Treasury yields also posted the biggest weekly loss since mid-2020 by the end of Friday. It should be noted that the S&P 500 Futures drop over 1.0% by the press time.
Looking forward, Risk catalysts and the US Consumer Price Index for February will be crucial for the USD/JPY pair traders to watch.
Technical analysis
USD/JPY is likely to continue trading sideways until either breaking the 100-DMA level surrounding 114.45 or a three-week-old resistance line, close to 115.65 at the latest.