Categories: Entertainment

USD/JPY consolidates in a range around mid-132.00s, eyes US PCE data for fresh impetus

  • USD/JPY struggles for a firm intraday direction and seesaws between tepid gains/minor losses.
  • A positive risk tone, widening US-Japan rate differential undermine the JPY and offer support.
  • Bulls, however, seem reluctant and prefer to wait for the US PCE data before placing fresh bets.

The USD/JPY pair builds on the previous day’s rebound from the 131.65 area and touches a three-day high on Friday, though lacks bullish conviction. The pair manages to hold steady around mid-132.00s through the early European session as traders keenly await the US Personal Consumption Expenditure (PCE) data before placing fresh directional bets.

The Fed’s preferred inflation gauge, the Core PCE Price Index is due for release later during the early North American session and will provide fresh cues on inflationary pressures. This, in turn, should play a key role in influencing the next policy move by the Fed and help determine the next leg of a directional move for the US Dollar. Heading into the key data risk, investors prefer to wait on the sidelines, leading to subdued range-bound price action around the USD/JPY pair.

The downside, meanwhile, remains cushioned amid a recovery in the global risk sentiment, which tends to undermine the safe-haven Japanese Yen. Apart from this, a further rise in the US Treasury bond yields, bolstered by reviving bets for a more aggressive policy tightening by the Fed, acts as a tailwind for the USD and lends some support to the USD/JPY pair. Against the backdrop of a more hawkish commentary by the Fed last week, the upbeat US macro data released on Thursday fueled speculations that the US central bank will have to stick to its hawkish stance to tame inflation.

This, in turn, pushes the yield on the benchmark 10-year US government bond closer to the monthly top. The resultant widening of the US-Japan rate differential could contribute to driving flows away from the JPY and supports prospects for some meaningful upside for the USD/JPY pair. That said, the Bank of Japan’s recent policy tweak, widening the range for fluctuations in the 10-year government bond yield, benefits the JPY and warrants caution for bullish traders. Hence, it will be prudent to wait for strong follow-through buying before confirming that spot prices have bottomed out.

Technical levels to watch

Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.

If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.

FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.

The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.

Read More

Salman Aslam

Salman Aslam is a Journalist at Flaunt Weekly.

Recent Posts

Three Years Later, Universal Music Settles Trademark Lawsuit Filed Against Investment Platform Republic

Flaunt Weeekly Flaunt Weeekly More than three years later, Universal Music Group (UMG) and the…

3 hours ago

Haiti’s budding musicians hold concert amid ongoing gang violence

Flaunt Weeekly Around the world, it’s time for year-end school concerts and Haiti is no…

5 hours ago

Review: Ada Pasternak gets personal and deep in her ‘I Wish I Never’ music video

Flaunt Weeekly There was Pasternak. Photo Courtesy of Ada Pasternak.Singer-songwriter and multi-instrumentalist Ada Pasternak released…

5 hours ago

‘His death is a great loss’ – President Higgins pays touching tribute to Irish music star’s father after tragic passing

Flaunt Weeekly PRESIDENT Michael D Higgins has paid tribute to the father of a member…

11 hours ago

Hozier Plays the Pogues’ “Fairytale of New York” on Saturday Night Live: Watch

Flaunt Weeekly Hozier returned to Saturday Night Live for the NBC program’s final pre-Christmas episode…

12 hours ago

Our Favourite Queer Artists Made Billboard’s 2024 Top Pop Stars List

Flaunt Weeekly Chappell Roan, Charli xcx and Billie Eilish have all made Billboard’s 10 Greatest…

12 hours ago