- US economic data overnight failed to support expectations for a June Fed interest rate hike.
- USD/JPY hit lows of 110.50 yesterday and remains rangebound in the Asian trade today.
- Persisting risk-off moods after poor PMI reports from the Asian economies keeps the downside in the major exposed.
- Today Japan released capital spending data with positive numbers at 4.2% q/q vs 1.9% q/q consensus forecast.
- Japanese PM Shinzo Abe came out on the wires via Bloomberg and finally announced his decision to delay sales tax increase by two and a half years, as widely speculated.
- USD/JPY rebounded sharply from a dip to 110.42 levels and retested 110.82, before easing slightly to now trade around 110.64.
- Upside in the pair intact till support at 110.34 (23.6% Fib) holds.
- We had advised a long in the pair (http://www.econotimes.com/FxWirePro-USD-JPY-spikes-above-the-111-handle-as-Yen-slumps-on-talks-of-possible-delay-in-sales-tax-hike-214527).
Recommend holding for targets. Bullish invalidation below 110 levels.
