USDJPY currently trading around 108.71 with relatively thin volumes as Japanese markets are in holiday and despite rising US Markets and 10-year note yield now at 2.90%, surpassing last week’s 4-year high. trading higher USDJPY pair is little changed from Fridays closing.
Early Tuesday, Japan will release its January Domestic Corporate Goods Price index and preliminary Machine Tool Orders. Japanese Preliminary GDP is expected to slow to 0.2% in the fourth quarter. Last week global market sell off triggerred strong relativity in currency markets. USDJPY made a low of 108.04, its lowest since September 2017.
Price momentum divergence is clearly visible on the 4 hour charts as the price is clearly moving in a sideways direction whereas momentum indicator MACD is showing a significant divergence which indicates potential trend reversal from the bottom. Short term supports coming around 108.20 with potential mean reversion could extend towards 110 and 110.5 levels.