USD/JPY: 'dot-plot' bid in Tokyo lacks vibrance

USD/JPY was up onto the 107 handle again and made a session high of 107.68 with a close around 107.40. Currently, USD/JPY is trading at 107.44, up 0.10% on the day, having posted a daily high at 107.54 and low at 107.31, slightly bid in the Tokyo open following-on the dollar positive sentiment post-Powell's upbeat assessment of the US economy. 

Powell's statement saying that his personal outlook for the economy has strengthened since the December meeting when arguing that tax cuts will boost investment, productivity and wages encouraged the market to believe that there will be a change to the dot-plot in March FOMC meeting. 

Funda and political wrap: Powell sends dollar and rates higher, option interest capping majors prior advances

US yields rally on Powell's testimony

As for yields, the US 10yr treasury yields leapfrogged from 2.86% to 2.92% during Powell’s testimony while the 2yr yields also climbed from 2.22% to 2.27%. The Fed fund futures yields factored in a 5bp for 2019 which brings a total of 4.5 hikes marked upon the dealing boards to the end-2019.

For data:

• US Richmond fed manufacturing index Feb: 28 (est 15; prev 14).
• US durable goods orders Jan: -3.7% (est -2.0%; prev r 2.6%).
• US Jan durable goods orders down 3.7pct m/m vs est minus 2.5pct and prev (r) up 2.6pct.
• US Jan ex-transportation durable goods down 0.3pct m/m vs est up 0.5pct and prev up 0.7pct.
• US Jan core durable goods down 0.2pct m/m vs est up 0.6pct and prev (r) minus 0.6pct.
• Richmond Fed manufacturing index for February 28 vs. 15 expected.
• US advanced goods trade balance -74.4b vs -72.3b expected.
• The Atlanta Fed GDP now estimate for first-quarter growth came in lower at 2.6% versus 3.2% last.
• Atlanta Fed GDP now estimate for 1q growth comes in at 2.6% vs 3.2% last.

USD/JPY levels

USDJPY: Buy @ 107.00

Valeria Bednarik, chief analyst at FXStreet explained that Technically, "The 4 hours chart shows that the pair met selling interest around a bearish 100 SMA, currently around 107.65, the immediate resistance, while technical indicators lost upward strength well into positive territory, but are not yet suggesting an upcoming slide. The pair also settled a few pips above the 23.6% retracement of its latest bullish run, although a more relevant support comes at 107.16, the high set on Monday."