- USD/JPY was seen oscillating in a range through the early part of trading on Wednesday.
- A positive risk tone undermined the safe-haven JPY and extended some support to the pair.
- Powell’s less hawkish comments weighed on the USD and capped gains ahead of the US CPI.
The USD/JPY pair seesawed between tepid gains/minor losses and remained confined in a narrow trading band below mid-115.00s heading into the European session.
A combination of diverging forces failed to provide any meaningful impetus to the USD/JPY pair and led to subdued/range-bound price action through the early part of the trading on Wednesday. A generally positive tone around the equity markets undermined the safe-haven Japanese yen and extended some support to the major. That said, the prevalent US dollar selling bias held back traders from placing fresh bullish bets.
Fed Chair Jerome Powell sounded less hawkish during his renomination hearing before the Senate on Tuesday and dragged the US Treasury bond yields lower. In fact, Powell said that it could take several months to decide on running down the central bank's balance sheet and eased fears about a sudden withdrawal of monetary support. This, in turn, was seen as a key factor that weighed on the buck and acted as a headwind for the USD/JPY pair.
Meanwhile, Powell didn't push back against market expectations for an eventual Fed lift-off in March 2022, which helped limit any deeper USD losses. Investors also seemed reluctant and preferred to wait on the sidelines ahead of Wednesday's release of the US consumer inflation figures, due later during the early North American session. This further warrants some caution before confirming the intraday direction for the USD/JPY pair.
Technical levels to watch
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. The author will not be held responsible for information that is found at the end of links posted on this page.
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.
The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.
Recommended content
Editors’ Picks
AUD/USD failed just ahead of the 200-day SMA
Finally, AUD/USD managed to break above the 0.6500 barrier on Wednesday, extending the weekly recovery, although its advance faltered just ahead of the 0.6530 region, where the key 200-day SMA sits.
EUR/USD met some decent resistance above 1.0700
EUR/USD remained unable to gather extra upside traction and surpass the 1.0700 hurdle in a convincing fashion on Wednesday, instead giving away part of the weekly gains against the backdrop of a decent bounce in the Dollar.
Gold stays firm amid higher US yields as traders await US GDP data
Gold recovers from recent losses, buoyed by market interest despite a stronger US Dollar and higher US Treasury yields. De-escalation of Middle East tensions contributed to increased market stability, denting the appetite for Gold buying.
Ethereum suffers slight pullback, Hong Kong spot ETH ETFs to begin trading on April 30
Ethereum suffered a brief decline on Wednesday afternoon despite increased accumulation from whales. This follows Ethereum restaking protocol Renzo restaked ETH crashing from its 1:1 peg with ETH and increased activities surrounding spot Ethereum ETFs.
Dow Jones Industrial Average hesitates on Wednesday as markets wait for key US data
The DJIA stumbled on Wednesday, falling from recent highs near 38,550.00 as investors ease off of Tuesday’s risk appetite. The index recovered as US data continues to vex financial markets that remain overwhelmingly focused on rate cuts from the US Fed.