In the US, traders are awaiting results of the mid-terms, where republicans only need 6 seats to gain control of the Senate. At the same time, Republicans are likely to expand their majority in the House. This means investors are perhaps exercising some caution because of the uncertainty around how this will play out and what it will mean for the markets.
On top of that, we have ADP non-farm payrolls data, which is expected to show a print north of 200,000 yet again. Any indication that data is tracking well ahead of expectations is likely to be construed as hawkish. Results from the elections will be hard to interpret, though, and this probably means traders will be looking to react to a move in price action.
Recent highs could be retested
The pair remains sidelined in Asia, just holding its ground at ¥113.65. Following the recent big move in USD/JPY, it’s not surprising to see the pair take a breather. Through Asian trade we have monetary base data, average cash earnings releases, and BoJ Governor Kuroda speaks at 1.30pm.
Given this speech comes on the back of the BoJ action last week, it’ll be watched closely. Any hints of further easing could weaken the yen even further. In the near term, traders will be eyeing a retest of Monday’s highs above ¥114.00.