USD/JPY trims early-Asian losses to eye 104.00 as US stimulus headlines favor risks

• USD/JPY picks up bids while extending pullback from 103.66.
• US House backed Trump’s demand of $2,000 paycheck, overrides veto of $740.5 billion defense policy bill.
• Fears of Senate members blocking the aid package, headlines concerning China, virus probe the bulls amid a quiet session.

USD/JPY extends corrective pullback from intraday low to 103.80 during early Tuesday. The pair’s latest positive performance takes clues from the US Congress as policymakers recently backed President Donald Trump’s push for extra paychecks while turning down the defense demands.

US President Donald Trump’s surprise signing of the US coronavirus (COVID-19) aid package pleased risk-takers on Monday. The House recently passed the additional paycheck demand from President Donald but couldn’t respect his stand on the Defense bill. The New York Times sums up the moves while saying, “Policymakers voted 322-to-87  override one of Mr. Trump’s vetoes, underscoring the sweeping popularity of the military legislation, which authorizes a pay raise for the nation’s troops.”

Other than the updates from Capitol Hill, CNBC’s news suggesting further economic hardships for China as well as The Guardian’s updates suggesting Australia’s push for covid trace in the World Health Organization (WHO) also probe the risks.

It should, however, be noted that a lack of major data/events keeps markets less active despite a mostly upbeat mood.

Against this backdrop, S&P 500 Futures rise 0.30% whereas the US 10-year Treasury yields rise one basis point (bp) to 0.94% by press time.

Moving on, a light calendar will keep directing USD/JPY traders toward the risk catalysts for fresh impetus. However, likely hardships for US stimulus in the Senate can keep challenging the buyers during the day.

Technical analysis

USD/JPY buyers need a successful break of the seven-week-old falling resistance line, at 103.90 now, to regain the 104.00 threshold.