USD / JPY clings to gains near session highs around 109.50

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  • The USD / JPY caught some new offers on Friday and has now recovered from the losses of the previous day.
  • Risk appetite undermined the safe-haven JPY and maintained its support.
  • The appearance of some buying around the USD provided an additional boost to the main one.

The pair USD/JPY it maintained its offered tone through the middle of the European session and was last seen hovering near the upper end of its daily trading range, around 109.50.

A combination of support factors helped the USD / JPY to regain positive traction on the last day of the week and reverse the subsequent losses to the US CPI of the previous day. The underlying bullish tone in financial markets, as shown by a prolonged rally in global financial markets, undermined the Japanese yen as a safe haven. This, coupled with a modest pickup in demand for the US dollar, continued to support the positive intraday move.

In fact, the key USD index fell slightly closer to weekly highs and did not appear to be affected by the ongoing decline in US Treasury yields. Investors largely ignored the CPI figures. Thursday, better than expected, and they remain convinced that the Fed will maintain its ultra-flexible monetary policy stance for a longer period. This, in turn, dragged the yield on the 10-year US government bond to the lowest level since early March.

Market participants are now looking forward to the release of Michigan’s Preliminary Index of US Consumer Confidence to get some momentum. However, the key focus will remain the next FOMC policy meeting on June 15-16. So it remains to be seen if the bulls can capitalize on the move or if the USD / JPY pair encounters some new bids at higher levels. However, the pair is still on track to finish flat for the week, pointing to indecision among traders.

Technical levels

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