- USD / JPY is struggling to find direction on Wednesday.
- Rising US Treasury yields limit USD / JPY losses.
- The US Dollar Index remains below 91.00 at the beginning of the American session.
The pair USD/JPY It is trading in a very tight range for the second day in a row on Wednesday and still having a hard time finding direction. At time of writing, the pair was virtually unchanged on the day at 104.18.
USD and JPY fail to attract investors
Risk flows began to dominate financial markets midweek amid renewed optimism over a US coronavirus stimulus bill deal and increased hopes for progress in trade talks between the EU and the UK. . Reflecting the risk-positive market atmosphere, the major global stock indices are trading higher on Wednesday and the major Wall Street indices remain on track to test new all-time highs.
However, market optimism weighs on both the JPY and the USD by curbing the demand for safe haven and forcing the USD / JPY to remain directionless.
Meanwhile, the 10-year US Treasury yield is up more than 2% on the day, limiting the positively correlated rise in USD / JPY. On the other hand, the US dollar index is losing 0.15% to 90.83 to reflect the broad selling pressure surrounding the dollar.
In the early trading hours of the Asian session, the Producer Price Index (PPI) and the BSI Large Manufacturing Conditions Index will appear on the Japanese economic docket, but they are unlikely to provoke a significant market reaction.