USD/JPY clings to modest gains near 110.60, eyes on US data
|- USD/JPY edges slightly higher following Thursday's sharp decline.
- US Dollar Index consolidates weekly losses, stays below 92.00.
- Investors await inflation and consumer sentiment data from US.
Following Thursday's decline, the USD/JPY pair dropped to a fresh 10-day low of 109.36 on Friday but managed to stage a modest recovery. As of writing, the pair was up 0.18% on the day at 109.66.
DXY inches higher on Friday
Although the recovery witnessed in the 10-year US Treasury bond yield helped the pair limit its losses on Thursday, the broad-based selling pressure surrounding the greenback caused USD/JPY to edge lower. The US Dollar Index (DXY) closed the fourth straight day in the negative territory and lost 0.4%.
Nevertheless, the DYX is posting small daily gains at 91.94 on Friday and allowing USD/JPY to stay green. Later in the session, the US Bureau of Economic Analysis will release the Personal Consumption Expenditures (PCE) Price Index data for June. Meanwhile, S&P Futures and Nasdaq Futures are down 0.65% and 1%, respectively, suggesting that safe-haven flows could dominate the markets and restrict USD/JPY's movements.
On the other hand, the data from Japan showed on Friday that the Unemployment Rate edged lower to 2.9% in June from 3% in May while Industrial Production expanded by 6.2%, compared to the market expectation of 5%.
Additionally, Japanese Prime Minister Yoshihide warned on Friday that the coronavirus is spreading at an unprecedented speed in Japan. "We are worried that the virus will continue to spread further," Suga added and these remarks could be putting additional weight on the JPY's shoulders.
Technical levels to watch for
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