- USD / JPY remains on the defensive in the American session.
- The US Dollar Index remains lower below 92.00.
- Rising US Treasury yields limit the decline in USD / JPY.
After spending most of the day moving sideways in a tight range below 110.00, the pair USD/JPY it was down in the US session and was last seen shedding 0.25% on the day at 109.63.
USD struggles to capitalize on rising Treasury yields
The incessant selling pressure surrounding the dollar appears to be forcing USD / JPY to remain on the defensive in the second half of the day. The US Bureau of Economic Analysis announced Thursday that the US economy grew at an annualized rate of 6.5% (first estimate) in the second quarter. This reading did not meet market expectations of 8.5%.
Other US data showed there were 400,000 initial jobless claims in the week ending July 24, compared with analysts’ estimate of 380,000, and pending home sales were down 1.9% in June.
Following the release of disappointing data, the US Dollar Index was down 0.36% on the day to 91.93.
Meanwhile, the 10-year US Treasury yield has risen almost 3% due to risk flows, keeping the USD / JPY downside limited for the time being.
On Friday, the unemployment rate data for June and retail trade for May will be included in the Japanese economic calendar. Later in the day, data from the Personal Consumption Expenditure (PCE) Price Index, the Fed’s preferred indicator of inflation, from the US will be considered for further momentum.
Technical levels
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