FX Update: USD-JPY has traded softer.
FX Update: USD-JPY has traded softer in the wake of Fed Chainman Powell's testimony before the Senate yesterday, where he said that he was in "no rush to make a judgment" on interest rates, affirming the central bank's pause. His testimony, along with consequential gains on global stock markets, albeit moderate, have presented mixed signals in terms of trading cues for forex markets, with the narrow trade-weighted Dollar index (DXY) posting three-week lows, while the Yen has traded mixed against various currencies. The MSCI Asia-Pacific equity index (ex Japan) has lifted 0.2%, nearing five-month highs. BoJ's arch dove Kataoka said that the Japanese economy is still a long way from ending ultra-easy policy, remarks which cast little impact on the Yen. Investors remain focused on U.S.-China trade talks, wanting more specifics. A piece in China's official Xinhua news agency warned earlier in the week that negotiations would get tougher in the final stages, saying that the "emergence of new uncertainty cannot be ruled out." Any sustained phase of risk aversion in global markets would likely drive USD-JPY lower. The pair has support at 110.40-42, which held after being tested yesterday.