- US growth and employment data beat expectations.
- The dollar is favored while the yen falls on rising yields.
- USD/JPY continues to move sideways with no clear direction ahead of the Jackson Hole symposium.
The USD/JPY bottomed on Thursday at 136.29 and then started a rebound, which was accelerated by the release of US economic data. The pair climbed to 136.85, and is trading at 136.75.
US data showed the economy contracted in the second quarter at a 0.6% pace, better than the 0.9% previously reported. In addition, requests for unemployment benefits fell more than expected.
The dollar rose on the data and Treasury yields rose. The latter put downward pressure on the yen in the market. Both currencies are favored by a fall in the price of shares on Wall Street.
Traders’ focus is now on the Jackson Hole symposium which starts in an hour. Federal Reserve Chairman Jerome Powell will speak there on Friday. It is not clear what he will say. Words hopefully have a big impact.
The USD/JPY continues to move in a range, unable to assert itself and break clearly above 137.00 and 137.20. In the opposite direction it has been rejected below 136.00, so if it asserts below it would leave the yen poised for more gains.
Technical levels
Source: Fx Street
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