USDJPY rises half a percent on broad US dollar strength, BoJ talks

Markets turned risk averse as traders await the US/UK inflation and GDP data from Japan, as well as Europe. Other than the pre-data anxiety, talks of spying via aerial objects also gained momentum and challenged the sentiment. Furthermore, hawkish comments from the Fed policymakers joined firmer US data to portray the risk-off mood.

While the aforementioned catalysts propelled the US Dollar, hopes favoring the long future of the Bank of Japan’s (BoJ) easy money policy exerted downside pressure on the Japanese Yen and fuelled the USDJPY the most among major currency pairs.

That said, the fears of higher Fed rates weigh on the prices of Gold and Crude oil. As a result, Brent Oil failed to cheer hopes of higher demand and fewer supplies.

Elsewhere, equities in the Asia-Pacific bloc trade mixed amid trader’s anxiety ahead of the bumper data week while US stock futures also print mild losses.

BTCUSD and ETHUSD, however, lick their wounds after posting the biggest weekly losses since early November.

Following are the latest moves of the key assets:

• Brent oil remains mildly offered around $84.40 after posting stellar weekly gains.
• Gold stays depressed at around $1,860 as bears prepare for top-tier data.
• USD Index grinds higher past 103.50, mildly bid after two-week uptrend.
• Wall Street closed mixed and challenged the equities in the Asia-Pacific region, as well as the shares in Europe and the UK.
• BTCUSD and ETHUSD both print mild gains to pare weekly losses around $21,850 and 1,520.

US Dollar has it all to rise

Be it the unknown object alleged to spy on the US and China or the fears of the Fed’s higher rates, the US Dollar has it all to remain firmer after a two-week uptrend. However, sluggish Treasury bond yields and a cautious mood ahead of Tuesday’s US inflation seem to probe the greenback bulls.

Elsewhere, the sour sentiment failed to lure USDJPY bears amid chatters that the BoJ’s new board has many doves who can happily favor the Japanese central bank’s easy money policy.

It’s worth noting that the AUDUSD, NZDUSD, and USDCHF managed to ignore the US dollar strength as the US rules out China’s hands in the spying over Washington.

Commodities again witness downside pressure as central banks tighten their belt amid a fresh wave of strong inflation cues and hawkish central bankers. Also, the yields-driven recession fears act as an additional negative for the commodity basket.

On a different page, optimism surrounding the increase in BTC production and hash rate contrasts with the ETH exchange outflow to confuse cryptocurrency traders.

• Strong buy: USDJPY
• Strong sell: ETHUSD, GBPUSD
• Buy: USD Index, USDCAD, Nasdaq, EURUSD
• Sell: DAX, FTSE 100, gold, BTCUSD, AUDUSD

A quiet Monday it is

While top-tier data are up for challenging the market sentiment during the week, Monday doesn’t have any major catalysts which could entertain the momentum traders. As a result, the markets may witness the continuation of the week-start moves ahead of the active Tuesday comprising Japan's GDP, UK job numbers and the US inflation.

May the trading luck be with you!