USD/JPY falls below 107.50 as DXY tests 99
- USD/JPY continues to edge lower during American session.
- US Dollar Index extends slide to fresh 16-day lows.
- The FOMC will release the minutes of its April meeting at 1800 GMT.
The broad-based selling pressure surrounding the USD caused the USD/JPY pair to extend its daily slide during the American trading hours. As of writing, the pair was down 0.22% on a daily basis at 107.45.
USD's market valuation impacts USD/JPY's movements
The strong performance of major equity indexes in the United States seems to have put the greenback under a renewed selling pressure in the absence of significant macroeconomic data releases. At the moment, the three main indexes of Wall Street are up between 1.7% and 2.05% and the US Dollar Index is at its lowest level in more than two weeks at 99.05.
Earlier in the day, Dallas Fed President Robert Kaplan said that the Fed will need to do more to support the economy but was largely ignored by the market participants.
At 1800 GMT, the FOMC will release the minutes of its April 28-29 monetary policy meeting. According to FXStreet analyst Joseph Trevisani, any positive mention of negative interest rates could weigh on the greenback.
Meanwhile, the upbeat market mood on Wednesday also makes it difficult for the JPY and helps the pair limit its losses for the time being.
In the early Asian session on Thursday, Jibun Bank Manufacturing PMI and Trade Balance data from Japan will be looked upon for fresh impetus.
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.
