USD/JPY clinging to multi-day support near 109 amid weaker USD, risk-on sentiment

The selling pressure around the US dollar picks up further momentum and pushes lower  USD/JPY towards the 109 mark in the early Asian session.

USD/JPY exudes downward pressure following three consecutive daily pullbacks and is expected to remain offered near the day’s highs level. 

At the time of writing, the USD/JPY pair is trading at 109.09, up 0.02% on the day.

The US dollar index (DXY), which tracks the greenback performance against the 6 majors, fell below 91 mark on Thursday tracking the downward movement in US Treasury yields from 1.58% to 1.55%. Fed Officials downplayed inflationary pressure and expressed concerns about the lag in full economic recovery.  US Treasury Secretary Janet Yellen comments on interest rates did not go well with the market, she clarified later on about her hawkish statement. 

The US weekly Initial Jobless Claims dropped by 92k to 498k, as the reading failed to uplift the sentiment around the USD and kept the pressure on the pair.

It is worth noting that S&P 500 Futures are trading higher at 4,195.38 on Friday.

On the other hand, the Japanese yen benefited from a decline in US Treasury yields and managed to gain some traction as a higher-yielding asset. Unfortunately, the return was limited as the Bank of Japan (BOJ) Monetary Policy Minutes revealed that risk remained in the economy as the COVID-19 pandemic continued to hurt consumption.

Investors now turn their attention to US Nonfarm Payrolls data, which added 916k jobs in March, the most in 7 months. However, there is still plenty of room for full job creation as roughly 8.5 million jobs are absent when compared to pre-pandemic times. Even a slight deviation in the readings could further diminish sentiment around the pair’s performance.

USD/JPY additional levels