USD/JPY drops to fresh daily lows near 106.50 after US data
- USD/JPY extends its daily slide in the early American session.
- Retail Sales in the US rose less than expected in July.
- US Dollar Index loses traction, edges lower toward 93.00.
The USD/JPY pair came under renewed bearish pressure in the early American session on Friday as the USD lost its strength after the latest macroeconomic data release from the US. As of writing, the pair was down 0.35% on a daily basis at 106.53.
USD weakens after Retail Sales report
The data published by the US Census Bureau showed on Friday that Retail Sales in the US rose by 1.2% to $536 billion in July. Although this reading came in worse than the market expectation for an increase of 1.9%, the initial market reaction provided a modest boost to risk sentiment with S&P 500 futures turning positive on the day.
Commenting on the data, "all in all, upbeat retail sales figures – alongside other robust statistics – are good news on their own, but they could eventually become bad news by discouraging politicians from acting," said FXStreet analyst Yohay Elam.
The US Dollar Index (DXY), which rose to 93.40 earlier in the day, lost its traction after the data and caused USD/JPY to turn south. At the moment, the DXY is down 0.15% on the day at 93.10.
Later in the session, Industrial Production, Capacity Utilization and the University of Michigan's Consumer Confidence Index will be the last data releases of the week from the US.
Meanwhile, the 10-year US Treasury bond yield is down 3.15% on a daily basis, making it difficult for the pair to stage a rebound.
Technical levels to watch for
Author
Eren Sengezer
FXStreet
As an economist at heart, Eren Sengezer specializes in the assessment of the short-term and long-term impacts of macroeconomic data, central bank policies and political developments on financial assets.
