USD/JPY: risks mounting to the downside, watch 112.90

Currently, USD/JPY is trading at 113.36, up 0.25% on the day, having posted a daily high at 113.48 and low at 113.02.

March Fed rate hike is off the table - CME data

USD/JPY has started off in Tokyo rather flat despite the action overnight on Wal Street and stocks continuing to print record highs overnight. The FOMC minutes dampened the mood while at the same time the French elections on their way are starting to cause a stir among investors and creating some risk-off play with headlines creeping through and price action reversing on more positive scenarios other than Le Pen for Globalisation and the status quo of which markets are favouring for the meantime. 

Data wise, Japan Services PPI for January arrived at +0.5% y/y vrs expected +0.5%. A measure of inflation for business to business services while International securities flows data for the week ended 17 February came out at the same time with Japanese buying Y 48.2bn of foreign bonds - that is the smallest net weekly purchase since January 2015.

USD/JPY levels

The FXStreet OB/OS Index is reflecting neutral hourly conditions, while the FXStreet Trend Index is strongly bullish.  Valeria Bednarik, chief analysts at FXStreet explained that the risk remains towards the downside. "Intraday advances remained contained by a bearish 200 SMA, currently around 113.70, whilst the price pressures its 100 SMA, and technical indicators turned lower around their mid-lines," adding, "Another attempt below 112.90 will probably open doors for additional declines towards the 112.00/20 region this Thursday."