- USD / JPY bounced after falling to the 110.70 zone.
- The US Dollar Index is holding on to daily gains above 92.50.
- The fall in US Treasury yields limits the rise of the USD / JPY.
The pair USD/JPY broke a three-day winning streak on Wednesday and lost more than 60 pips. Although the pair extended its decline to a weekly low of 109.71 early in the American session, it managed to rebound and was last seen posting small daily gains at 110.05.
DXY recovers above 92.50
The renewed strength of the USD in the second half of the day helped the USD / JPY gain traction. The risk-averse market environment helped the dollar find demand on Thursday and investors paid little or no attention to the release of mixed macroeconomic data from the US.
The US Department of Labor reported earlier in the day that Initial Unemployment Claims dropped to 360,000 in the week ending July 10, marking the lowest figure since March of last year. Other data from the US showed that New York’s Empire State Manufacturing Index rose sharply to 43 in July from 17.4 in June. On a negative note, the Philadelphia Fed manufacturing index fell to 21.9 from 30.7 and industrial production expanded 0.4%, compared to the market’s expectation of 0.7%.
Meanwhile, the 10-year US Treasury yield is shedding nearly 2% on Thursday, making it difficult for USD / JPY to rise.
On Friday, the Bank of Japan will announce its Interest Rate Decision and publish the Monetary Policy Statement. With a preview of this event, “the BOJ is ready to lower its forecast amid the spread of COVID-19 in Japan and around the world,” said FXStreet analyst Yohay Elam. “That could weigh on the yen, even temporarily, as the currency is a safe-haven asset. Another beneficiary is the dollar, but the yen generally has the upper hand.”
Technical levels
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