USD/JPY touches multi-year high near 112.00 amid stronger USD, ahead of US GDP
|- USD/JPY continues to grind higher on Thursday.
- The US Dollar Index remains strong above 94.00 despite lower US T-bond yields.
- Fed tapering expectations amid hawkish Fed members led to the gains in USD/JPY.
USD/JPY edges higher on Thursday extending the overnight gains. The pair composed of nearly 80-pips movement in the previous session fueled by the upside in the greenback. At the time of writing USD/JPY, is trading at 111.97, up 0.01% for the day.
The US benchmark 10-year Treasury yields for the first time in the past five sessions fell slightly on Wednesday as the recent selling pressure for bonds cooled. The US Fed Chair Jerome Powell said at a European Central Bank event that supply-side disruption could end up in long-lasting inflation than earlier estimated.
The US Dollar Index (DXY), which tracks the performance of the greenback against six major currencies, peaked above 94.00, its highest since September 2020 fueled by the growing expectations that the Fed will soon begin tapering and investors becoming concerned about the pace of global economic growth and rising energy costs.
Meanwhile, the disagreement between Democrats jeopardized US President Joe Biden’s agenda at the idea of delaying a $1 trillion infrastructure bill ahead of a critical vote to avert a government shutdown.
On the other hand, the Japanese yen lost its grounds as the Bank of Japan (BOJ) Governor Haruhiko Kuroda cited weak consumption and lower inflation putting Japan’s economic growth on the backburner. Furthermore, the ruling government anointed former foreign minister Fumio Kishida as the new party leader, ensuring he will become prime minister during upcoming elections.
As for now, traders are waiting for the slew of data: Japan’s Retail Sales, Industrial Production Data, US Gross Domestic Product (GDP), and Initial Jobless Claims to gauge market sentiment.
USD/JPY additional gains
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