USD/JPY extends sideways grind near 107.50, looks to post modest weekly gains
|- USD/JPY remains on track to finish second straight week higher.
- US Dollar Index turns flat on the day near 97.20.
- Activity in Japan's service sector recovered sharply in June.
The USD/JPY pair is moving sideways in an extremely tight 15-pip range on Friday amid thin trading conditions and a lack of significant fundamental drivers. As of writing, the pair was virtually unchanged on the day at 107.50. On a weekly basis, the pair is up 30 pips.
Japan's service sector shows signs of life
Earlier in the day, the data from Japan showed that the Jibun Bank Services PMI rose from 26.5 in May to 45 in June. Commenting on the data, "panel comments suggest that service sector demand conditions remain very fragile and although the spread of the virus has stabilised in Japan, customer numbers were reportedly still low in June," said Joe Hayes, Economist at the IHS Markit. "Until demand rises persistently at a strong rate, we can expect a sluggish recovery."
Boosted by this data, the Nikkei 225 Index rose 0.66% on Friday. However, the market sentiment turned sour during the European session and major European equity indexes remain on track to close the day in the negative territory.
Meanwhile, the US Dollar Index is staying flat on the day near 97.20 on Friday, making it difficult for the pair to determine a short-term direction.
On Thursday, the US Bureau of Labor Statistics' monthly report revealed that Nonfarm Payrolls in the US increased by 4.8 million in June. However, the rising number of confirmed coronavirus cases in the US caused investors to remain cautious and helped the greenback stay strong against its peers.
Technical levels to watch for
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.