USD/JPY ticks higher as investors welcome Trumpcare

USD/JPY is enjoying moderate gains this Friday morning in Asia after the US House of Representatives approved a bill on Thursday to repeal major parts of Obamacare and replace it with a Republican health care plan.

This is Trump’s biggest legislative victory so far and is sure to calm investors who were worried about Trump’s ability to get things done. Now that the health care bill is passed, investors expect Trump to deliver on the fiscal front as quickly as possible.

The Dollar-Yen pair responded to the positive news by moving higher to 112.63. The gains have been capped to some extent due to caution ahead of the non-farm payrolls release.

The moderate gains in the USD/JPY pair are pretty much in line with the uptick in the treasury yields. The 10-yr yield is up 4.3 basis points at 2.352%, while the 2-yr yield is up 1.2 basis points at 1.31%.

USD/JPY Technical Levels

A break above 113.00 (zero figure + falling trend line hurdle) would 113.61 (Mar 8 low) and 114.00 (zero levels). On the other hand, a breakdown of support at 112.33 (5-DMA) could yield a pullback to 111.69 (50-DMA) and 111.60 (Feb low).