USD/JPY rebounds towards 104.50 as USD selling stalls
- USD/JPY attempts a bounce alongside the DXY.
- Risk-off returns in Asia after a record rally on Wall Street.
- Focus remains on US fiscal stimulus updates and ADP jobs.
Fresh bids once again emerged near the 104.20 region, allowing a tepid bounce in USD/JPY towards 104.50, as the US dollar bears took a breather after the overnight slump.
The sentiment has turned sour in Asia this Wednesday after the record rally seen on Wall Steet amid the revival of the US fiscal stimulus talks, which sent the riskier assets higher.
This comes after the Bipartisan Congress unveiled a $908 billion aid proposal late Tuesday. Also, the US Treasury Secretary Steve Mnuchin and House of Representatives Speaker Nancy Pelosi held stimulus talks for the first time since the election.
The US dollar index tumbled to fresh a two-and-a-half-year low at 92.16 on improved risk sentiment. Meanwhile, the USD/JPY bounce from lows can be partly attributed to the pause in the dollar’s sell-off, as investors await the stimulus talks for fresh impetus.
The US ISM Manufacturing PMI for November missed estimates with 57.5 while Fed Chair Jerome Powell reiterated his cautious stance on the economic recovery, exacerbating the pain in the buck.
Looking ahead, the focus will remain on the stimulus talks and US ADP jobs data, which will likely influence the broader market sentiment and eventually the major. Meanwhile, markets paid little heed to the comments from the BOJ Deputy Governor M. Amamiya, as he offered no new surprise.
USD/JPY technical levels