- USD / JPY falls below 110 on the weakness of the dollar.
- Market sentiment is pessimistic, benefiting the Japanese yen’s safe-haven status against the dollar.
- Unemployment claims and US retail sales will be released Thursday.
After logging a maximum of three days during the Asian session, the USD/JPY It turned around and is trading around 109.59, down 0.33% on the day, due to the general weakness of the US dollar. The dollar has been dragged down by a 3.46% drop in 10-year US yields.
Risk aversion remains, so the market dumps everything with the word “risk” attached, benefiting the Japanese yen. The 10-year US Treasury yield, which is positively correlated with the USD / JPY pair, fell four basis points in the session, currently at 1,284%. Meanwhile, the US dollar index is down 0.10%, trading at 92.51.
US inflation figures sparked a selloff of the USD
In the United States, the core consumer price index in August rose 4% from the 4.3% forecast by economists. It’s the slowest pace in six months, hinting that inflation has potentially peaked. This reaffirms the Fed’s “transitory” thesis. However, despite waning inflation, supply chain disruptions and a shortage of semiconductor chips remain in play and could exert inflationary pressures.
That said, if the “transitory” theory of price rises takes hold, the US dollar could continue its downtrend. Retail sales figures for August and consumer confidence data for September will be released this week.
Technical levels
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