- USD/JPY extends three-day winning streak amid US Dollar strength.
- The Dollar Index rose to around 106.30 even though consumer confidence fell in September.
- Higher wage growth is needed to keep Japanese inflation stable above 2%.
For its part, the USD/JPY pair extended its upward trend towards 149.20 during the trading session on Wednesday. The pair continues to attract bids as the US dollar remains resilient amid growing fears of a global slowdown. The pair has continued its bullish streak for the fourth session despite hopes of covert currency intervention by the Bank of Japan (BoJ) to support the Japanese Yen.
S&P 500 futures added decent gains in the London session, reflecting an improvement in the risk appetite of market participants. US stocks sold heavily on Tuesday as investors remain concerned about the long-term outlook, which is deteriorating as the Federal Reserve (Fed) is expected to keep interest rates higher for longer.
The Dollar Index (DXY) rose to around 106.30 despite consumer confidence falling in September. On Tuesday, the US Conference Board reported that consumer confidence in the US economy had declined across all age groups. The sentiment data fell to 103.0 in September from August’s reading of 108.7. Households appear concerned about consumer inflation, political uncertainty and rising interest rates.
On Wednesday, the focus will be on the August Durable Goods Orders report. Investors expect a contraction at a slower pace of 0.4%. In July, economic data contracted 5.2%. Weakness in underlying goods orders data would highlight the bleak outlook for the long-contracting manufacturing sector.
Meanwhile, the Japanese Yen struggles to hold firm as Bank of Japan Governor Kazuo Ueda supports the continuation of easy monetary policy conditions. BoJ Ueda cited the need for sustained wage growth to keep inflation stable above the 2% target over a secular period. Looking ahead, investors will focus on inflation data from Tokyo, due out on Friday.
Source: Fx Street
I am Joshua Winder, a senior-level journalist and editor at World Stock Market. I specialize in covering news related to the stock market and economic trends. With more than 8 years of experience in this field, I have become an expert in financial reporting.
