USD/JPY gauges a short-term cushion above 139.00 amid US Dollar’s recovery

The USD/JPY pair has found an intermediate cushion around 139.00 in the London session. The downside momentum in the asset has been intervened as the US Dollar Index (DXY) has displayed a decent recovery move after defending the crucial support around 103.80.

S&P500 futures are showing nominal losses in Europe, portraying a cautious market mood. Investors seem puzzled after crucial United States economic indicators for May as they have divided the street about Federal Reserve (Fed)’s interest rate policy for June month.

The USD Index is making efforts for keeping its auction comfortable above 104.00. Investors are mixed about Fed’s policy as the consistent addition of fresh payrolls in the labor market is expected to keep spending levels at a peak, which would result in demand-pull inflation. While weakening scale of economic activities supports a neutral interest rate policy to avoid the United States economy from falling into recession.

Meanwhile, lending from US commercial banks is still higher despite soaring interest rates by the Fed. In a CNBC interview on Monday, International Monetary Fund (IMF) Managing Director Kristalina Georgieva said that "We don't yet see a significant slowdown in lending.” She further added, “There is some, but not on the scale that would lead to the Fed stepping back,”

The Japanese Yen is still getting strength despite dovish commentary from Bank of Japan (BoJ) Governor Kazuo Ueda. BoJ Ueda said the central bank will continue quantitative easing until the achievement of the inflation target," He further added changes are emerging gradually to a deflationary mindset that prices and wages are hard to rise.