USDJPY rebound from 139.00

-,USDJPY has picked bids around 139.00 as Russia-Poland tensions have underpinned risk-off mood.

- S&P500 futures have displayed a significant drop in Tokyo after a volatile Tuesday.

- Polish President sees Russian military activity as a one-time incident and no indications of a repeat ahead.

The USDJPY pair has sensed buying interest after a marginal drop to near 139.00 in the Tokyo session. On Tuesday, the asset witnessed a power-pack responsive buying action after testing the previous week’s low around 138.30. Negative market sentiment was triggered as Russian military attacks expanded to NATO-member Poland after invading Kyiv.

This led to a solid recovery in the US dollar index (DXY) as investors hid behind safe-appeal to safeguard themselves from sheer volatility. The mighty DXY picked bids after registering a fresh three-month low of around 105.35.

Further development on Russia-Poland tensions will provide fresh impetus to the market participants. Meanwhile, Polish President Andrzej Duda has cited that what happened was a one-off incident, adding that there were no indications that there will be a repeat of today's incident. The risk-off tone has not eased yet as the Poland administration has also scheduled a meeting with NATO ambassadors.

S&P500 futures are displaying losses in Tokyo after a wild gyration on Tuesday. It seems that geopolitical tensions are weighing on the 500-stock basket. Also, the release of the US Retail Sales will keep the index futures on the tenterhooks. According to the preliminary estimates, the economic data will improve to 0.9% vs. the former release of 0%. Robust demand in times of accelerating interest rates and a decline in the inflation rate in October could delight the DXY.

On the Tokyo front, the hangover of a contraction in Gross Domestic Product (GDP) is expected to keep the Japanese yen dozy.  The GDP contracted by 0.3% in the third quarter vs. the expectation of an expansion of 0.3%.

USD/JPY