- Spot remains on the defensive around 112.70.
- Lower US 10-year yields behind the down move.
- US CPI, retail sales and Empire State index next on US docket.
The greenback stays in the red territory for the second session in a row on Wednesday and is now dragging USD/JPY to the area of multi-week lows in the 112.70 region.
USD/JPY eyes on key US data
The pair is trading in fresh 4-week lows in the 112.75/70 band following a weak performance in yields of the key US 10-year benchmark, currently dropping to fresh lows in the 2.33% neighbourhood, around 8 bps lower than weekly tops beyond 2.41% seen yesterday.
Increasing uncertainty around the US tax reform plans proposed by the Republicans keep putting the buck under further selling pressure, while latest news cited House Republicans will vote on their tax reform bill tomorrow. In this regard, it is worth mentioning that both House and Senate are planning to pass separate bills before reconciling them.
Looking ahead, key US inflation figures gauged by the CPI are due next, seconded by October’s retail sales and the NY Empire State manufacturing index for the current month.
USD/JPY levels to consider
As of writing the pair is losing 0.63% at 112.73 and a break below 112.22 (55-day sma) would expose 111.90 (38.2% Fibo of 107.33-114.73) and then 111.77 (200-day sma). On the other hand, the next hurdle lines up at 113.59 (21-day sma) seconded by 113.66 (10-day sma) and finally 113.92 (high Nov.14).
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