USD/JPY edges higher toward 110.00 ahead of US data, FOMC Minutes
|- USD/JPY broke out of daily trading range ahead of American session.
- 10-year US T-bond yield is moving sideways on Wednesday.
- Investors await US data, FOMC's July meeting minutes.
After closing in the positive territory on Tuesday, the USD/JPY pair moved sideways near 109.50 during the Asian trading hours but managed to regain its traction. As of writing, the pair was up 0.2% on a daily basis at 109.80.
USD/JPY extends rebound ahead of key FOMC publication
The renewed USD strength helped USD/JPY turn north on Tuesday. The US Dollar Index, which posted small gains on Monday, rose more than 0.5% and reached a weekly high of 93.17. Nevertheless, the risk-averse market environment allowed JPY to find demand as a safe haven and stay resilient against its major rivals.
Earlier in the day, the data from Japan revealed that Machinery Orders declined by 1.5% on a monthly basis in June. This reading came in better than the market expectation for a decrease of 2.8% but failed to provide a boost to the JPY.
In the early trading hours of the American session, July Housing Starts and Building Permits data from the US will be looked upon for fresh impetus. More importantly, the FOMC will release the minutes of its July meeting at 1800 GMT.
In the meantime, the S&P Futures are trading flat on the day, suggesting that investors are likely to remain cautious in the second half of the day and limit USD/JPY's fluctuations. Furthermore, the benchmark 10-year US Treasury bond yield is moving sideways after closing the previous two trading days flat, reflecting the choppy trading action.
Technical levels to watch for
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