- Yen drops sharply as US yields soar on American hours.
- Dollar gains ground and trims losses, DXY up by 0.24%.
The USD/JPY turned decisively higher for the day after, rising sharply from two-month lows near 108.70 to 109.67. It is hovering around 109.50, having the best day in two weeks, facing resistance around the 100-day simple moving average at 109.60.
Comments from Fed’s Clarida boost USD
A lower-than-expected reading of the ADP private employment report earlier on Wednesday sent the greenback to the downside. USD/JPY bottomed at 108.69, the lowest level in two months. It then bounced sharply, supported by Fed’s Clarida comments and ISM service sector data.
The July ISM service sector came in at 64.1, surpassing expectations. Around the same time, Fed Vice Chair Clarida offered hawkish comments. He said the economy could warrant interest rate hikes by early 2023.
Minutes after, the US dollar jumped across the board, erasing most of its losses. The DXY turned positive, and it is up by 0.24%. Treasuries tumbled in a few minutes. The US 10-year yield rose from a monthly low at 1.12% to 1.21%, boosting the dollar and weakening the Japanese yen.