Last week, the positive performance of the USD/JPY currency pair and the rebound gains reached the resistance level of 109.85 before closing trading stable around the 109.68 level. This is the closest to the 110.00 psychological resistance, which stimulates more bullish momentum.
The US dollar pairs waiting for an important day this week with the US Federal Reserve announcing its monetary policy. All eyes will be on the tone of the bank's policy statement and the statements of Governor Jerome Powell to anticipate the future of his policy. Expectations so far indicate that the bank will not change interest rates at this meeting.
Beijing has taken several initiatives in recent weeks on commodities, the yuan, and cryptocurrencies. It is intensifying its efforts to rein in commodity prices. Two new efforts on commodities were announced. First, base metals from official reserves, including copper, aluminum and zinc, will be supplied directly to end users. Second, steel mills in Tangshan have been ordered to restrict production (from June 10 to June 15) to combat pollution. China's iron ore and rebar futures rose today for the third consecutive session.
China was not invited to the G7 meeting, but it does stand out. A common competitor is the key to reasserting American leadership. Efforts to re-investigate the origins of the Covid-19 pandemic are clearly not necessary to combat the virus or to tighten laboratory security on a large scale, which has been seen as lax. The origins of the so-called Spanish flu are still not fully agreed upon.
Top US and Chinese diplomats appeared to have another strongly-worded exchange, with Beijing saying it had asked the United States to stop interfering in its internal affairs and accusing it of politicizing research on the origin of the COVID-19 pandemic. China's top foreign policy adviser Yang Jiechi and Foreign Minister Anthony Blinken had a phone call last Friday that exposed wide divisions in a number of controversial areas, including the restriction of freedoms in Hong Kong and the mass arrests of Muslims in the northwestern region of Xinjiang.
Yang said China was "extremely concerned" about what he called "ridiculous" stories about the virus escaping from a laboratory in the central Chinese city of Wuhan, where cases were first detected. The United States and other countries have accused China of failing to provide the raw data and access to sites that would allow for a more thorough investigation of where the virus originated and how it initially spread.
In light of the meeting of the Group of Seven major industries, the world is awaiting what will result from the summit ahead of global efforts to eliminate the Corona virus. The managing director of the International Monetary Fund said there is a moral duty for the world's richest countries to support programs to end the COVID-19 pandemic, but donating excess vaccines is only the first step. Kristalina Georgieva's comments at a virtual press conference at the G7 summit on Sunday came after British Prime Minister Boris Johnson said he hoped G7 leaders would agree to provide at least one billion doses of vaccine to poor countries. Humanitarian organizations have welcomed the donations, but are asking for money, increased production and logistical support to help developing countries where the virus is still endemic.
Currently nearly half of the population of G7 countries has received at least one dose of the vaccine, and the global figure is less than 13%. In Africa, the proportion is only 2.2%.
Technical Analysis of USD/JPY: The current attempts to rebound to the top of the USD/JPY currency pair will not succeed without breaching the 110.00 psychological resistance level. Which may motivate forex investors to think of more buying and thus rush towards higher tops and the closest ones are currently 110.25, 111.00 and 111.75 respectively. The bears' control will return to the performance if the currency pair moves towards the 108.80 support level. The situation is now neutral, with a tendency to the upside.
Amidst the absence of the economic calendar today of important US and Japanese economic data, investor sentiment for risk appetite or not will have a stronger reaction to the pair's performance.