USD/JPY recovers above 109.30 ahead of US data
- USD/JPY fluctuates in a tight range following Monday's decline.
- US Dollar Index extends rebound beyond 92.70 ahead of American session.
- Focus shifts to Retail Sales and Industrial Production data from US.
After closing the first day of the week deep in the negative territory, the USD/JPY pair struggled to gain traction during the Asian trading hours. With the greenback regathering its strength in the European session, however, the pair managed to stage a rebound and was last seen rising 0.09% on the day at 109.32.
DXY continues to edge higher
On Monday, the sharp decline witnessed in the US Treasury bond yields weighed heavily on USD/JPY. Although the benchmark 10-year US T-bond yield remains on the back foot and loses more than 3%, the pair's downside stays limited with the USD outperforming its major rivals.
The US Dollar Index, which managed to register small gains on Monday, is currently rising 0.12% on the day at 92.72. In the meantime, Wall Street's main indexes look to open lower for the second straight day with US stocks futures indexes losing between 0.35% and 0.55%. In case risk-off flows continue to dominate the financial markets in the second half of the day, the pair is likely to have a tough time pushing higher.
Earlier in the day, Japan announced on Tuesday that it has extended the state of emergency measures until September 12 with seven more prefectures being included.
Later in the day, July Retail Sales and Industrial Production data from the US 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.
