- USD/JPY consolidates the previous day’s gains on Friday.
- Rebound in US Treasury yields uplifts the demand for the US dollar.
- Yen gains are suppressed as market sentiment improves after the US Fed bank stress test.
The appreciative move in the US dollar keeps, USD/JPY higher with steady moves. The pair moves in a narrow trade band with no meaningful traction.
At the time of writing, USD/JPY is trading at 110.86, down 0.01% for the day.
The US Dollar Index( DXY), which measures the performance of the greenback against its six major rivals, stands unchanged at 91.80 with 0.3% gains. The US Treasury yields traded at 1.49% on Friday, above the four month low of 1.36% touched earlier in the week.
The greenback limits the gain on the mixed US economic data. Durable Goods orders rose 2.3% inMay, below the market expectations at 2.8%. The Weekly Jobless Claims fell less than expected last week. The readings suggest that labor market conditions are improving but at a slower pace.
In another set of data, the US economy grew by 6.4% in Q1 in line with the market consensus. The US goods trade deficit widened to $88.1 billion in May, from $85.7 in the previous month.
Meanwhile, the US large banks clear the Fed’s stress test. The central bank lifted limits on buybacks and dividends, it had put in place as the COVID-19 pandemic hit the economy.
In addition to that, US President Joe Biden declared a “deal” on its infrastructure plan after meeting with a bipartisan group of senators. However, there are still some differences between the two sides, which need to be resolved.
On the other hand, the Japanese yen remains pressurized on the improved risk sentiment. The country is struggling with COVID-19 and slower vaccination issues.
The growth differentials in the US and Japan weigh on the prospects of the yen.
As for now, investors are waiting for the US Personal Income and Spending data, PCE Price Index, and Michigan Inflation Expectation. The Tokyo CPI data is also on the traders' taps to gauge the market sentiment.
USD/JPY additional levels
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 retreats towards 0.6900 amid cautious markets

AUD/USD is easing towards 0.6900, fading a renewed uptick amid a cautious market mood. The US dollar is attempting a bounce, as investors rethink the impact of aggressive Fed rate hikes on growth. A dip in the Australian business confidence survey also weighs on the AUD.
USD/JPY drops towards 135.00 amid risk-aversion

USD/JPY is heading south to test 135.00, having failed to sustain above 135.50. The pair is falling in tandem with the US Treasury yields while the return of risk-off flows underpins the USD bounce. Focus shifts to US data.
Gold bounces off $1,820 support zone, focus on US data, Fed’s Powell

Gold Price consolidates recent losses at around $1,825.00 during Tuesday’s Asian session. In doing so, the yellow metal takes clues from the market’s cautious optimism ahead of the key US consumer sentiment numbers and the much-awaited central bankers’ debate at the ECB forum.
ApeCoin price edges near a critical level, is the uptrend genuine?

ApeCoin price shows compression of two Simple Moving Averages as price consolidates. APE price shows bullish re-entrance on the Volume Profile pattern, but traders should steer away from being early buyers. Invalidation of the bear trend remains at $6.15.
FXStreet Premium users exceed expectations
_XtraSmall.png)
Tap into our 20 years Forex trading experience and get ahead of the markets. Maximize our actionable content, be part of our community, and chat with our experts. Join FXStreet Premium today!