- USD / JPY lost its traction after climbing to fresh six-day highs.
- US Dollar Index Clings to Daily Gains Near 2021 Highs
- The flight to safety helps the JPY stay resilient against its main rivals.
The pair USD/JPY it rose to its highest level in nearly a week at 110.22 on Thursday, but struggled to preserve its bullish momentum. At time of writing, the pair was virtually unchanged on the day at 109.72.
L Fall in US Treasury Yields, Risk Aversion Supports JPY
The sharp drop observed in the main European stock indices allowed the JPY to find demand and on Thursday. Reflecting the risk averse market environment, the major Wall Street indices started the day in negative territory and was last seen losing around 0.5% on the day.
On the other hand, the US Dollar Index (DXY) continues to rise as the minutes of the FOMC’s July meeting failed to change investors’ expectations that the Fed will begin reducing assets before the end of the year. Currently, the DXY is at its strongest since November at 93.50, up 0.37%.
Earlier in the day, US data showed that initial jobless claims declined to the lowest level since March 2020 to 348,000 in the week ending August 14. This reading was better than the market expectation of 363,000, but had little to no impact on market sentiment.
Meanwhile, the 10-year US Treasury yield is down 1.1%, making it difficult for the USD / JPY to capitalize on the strength of the USD.
On Friday, July National Consumer Price Index data will be included in the Japanese economic docket.
Technical levels
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