- USD/JPY whipsaw for the past two sessions as it lacks the strength to move directionally.
- US Dollar holds onto the higher level as inflation anxiety eases post-FOMC minutes.
- Yen gains on the optimistic economic projection and COVID-19 resurgence globally.
USD/JPY struggles to find any direction on Thursday in the Initial Asian session. The pair continues to confide in a narrow trading range with no meaningful traction.
At the time of writing, USD/JPY is trading at 110.63, up 0.02% for the day.
The US Dollar Index (DXY) held steady near its 13-week high as concerns about early tapering by the Federal Reserve eased after the central bank’s June meeting minutes showed that substantial further progress on the economic recovery is still at large, though progress was expected to continue.
The US Treasury yields edged lower towards 1.3% as expectations of sooner-than-expected Fed rate hikes vanished after Fed’sdovish stance.
The Institute of Supply Management (ISM) Non-Manufacturing PMI dropped to 60.1 in June, much lower than the market expectations at 63.5.
Lower bond yields and soft economic data built pressure on the US dollar.
On the other hand, the Japanese yen gained after the Japanese government revised its expectations for economic growth this year amid solid exports and consumer spending.
As per the estimates, the economy is expected to expand 3.7% during the fiscal year to end-March and the real gross domestic product (GDP) will exceed $40.9 trillion recorded in October-December 2019.
Investors switched to safe haven assets on the rapid spread of the Delta coronavirus variant as it dampens the speedy global economic recovery prospects.
As for now, investors are waiting for the US Initial Jobless Claims data to gain some fresh trading insight.
USD/JPY additional levels