• Russia invasion on Ukraine triggered the traders to rusk towards the safe haven assets.
• Upbeat US data and Hawkish comments from Fed favors the USD bulls.
• Geopolitical developments will determine the next market move.

US dollar edges high against its counterpart Japanese Yen during Friday trading session. Traders flocked towards safety after Russia’s invasion which favored both the safe haven currencies. However, hawkish comments from Fed and upbeat US data seem to have added to the USD’s strength.

Russia launched its invasion by land, air and sea on Thursday following a declaration of war by Putin. An estimated 100,000 people fled as explosions and gunfire rocked major cities. Dozens have been reported killed.

Top European Union leaders said on Friday that President Vladimir Putin “must and will fail,” as they agreed new sanctions over his invasion of Ukraine, saying he was trying to bring the continent back to the age of empires and confrontations.

The bloc’s leaders agreed in principle at an emergency overnight summit to impose new economic sanctions, joining the United States and others in taking steps such as curbing Russia’s access to technologies. The EU will freeze Russian assets in the bloc and halt its banks’ access to European financial markets as part of what EU foreign policy chief Josep Borrell described as “the harshest package of sanctions we have ever implemented”.

On the same line,  Japan also seem to strengthen sanctions against Russia to include financial institutions and military equipment exports, Prime Minister Fumio Kishida said on Friday, following a similar move by Washington in retaliation after the invasion of Ukraine.

Amidst the Russia-Ukraine jitters favoring the safe haven , the upbeat US data favored the US bulls. US Q4 GDP of 7.0% exceeded the forecast and the previous readout of 6.9% and Firmer New Home Sales with a reading of 0.801M against the expectation of 0.776M and upbeat Chicago Fed National Activity also helped the USD bulls.

On the other hand, Tokyo Consumer Price Index (CPI) rose to 1.0% YoY versus 0.6% expected whereas Tokyo CPI ex Food, Energy dropped to -0.6% from -0.7% previous readings and -0.5% forecasts and -0.7% previous readout for February.

The Hawkish comment from Atlanta Fed President and FOMC member Raphael Bostic and Richmond Fed President, as well as an FOMC member, Thomas Barkin underpinned the bullish move of the US dollar Even though Cleveland Fed President Loretta Mester said that she doesn’t think raising interest rates by 50 bps in March is compelling.

USD/JPY 4 Hour Chart:

Support: 114.71 (S1), 113.91 (S2), 113.42 (S3).

Resistance: 116.00 (R1), 116.49 (R2), 117.29 (R3).

The upbeat data and the hawkish comment from the Fed drives the US Bulls, However the geopolitical developments is the major catalyst in the financial market now. In the meantime, we expect a bullish trend for USD/JPY.