USD/JPY refreshes daily lows below 109.70 on broad-based USD weakness
- USD/JPY dives further down on the broader dollar weakness on the first trading day of the week.
- US Dollar Index slips below 92.00 for the first time since August.
- US Treasury yields rebound capping the downside for the US dollar.
After moving in a familiar trade band, USD/JPY kickstarts the fresh trading week on a lower note. The pair fell below 109.50 for the first time since August on disappointing NFP data.
At the time of writing, USD/JPY is trading at 109.73, down 0.20 % for the day.
The move in the pair was primarily sponsored by the sell-off in the US dollar. The US Dollar Index, which tracks the performance of the greenback against its six major rivals move south to trade near 91.90 before travelling above 92.00.
The Nonfarm payroll data disappointed the market as investors assessed the downbeat data as a signal of delay in the Fed’s plan to reduce asset purchase program. The readings came at 235K jobs as compared to market expectations of 750K whereas the unemployment rate dropped to 5.2%, in line with the market expectations.
On the other hand, the Japanese Yen continued to struggle with political turmoil, economic distress and coronavirus outbreak.
Japan’s Prime Minister Yoshihide Suga resigned and decided not to participate in the September election. The au Jibun Bank Japan Services Purchase Managers Index (PMI) came at 42.9 in August lower from the 47.4 in the previous month.
In the latest development, the Japanese government might be extending a state of emergency in Tokyo and some other states until the last week of September in order to manage the coronavirus pandemic.
As for now, the sentiment surrounding the US dollar continues to influence the pair’s performance in a short time.
USD/JPY additional levels
Author
Rekha Chauhan
Independent Analyst
Rekha Chauhan has been working as a content writer and research analyst in the forex and equity market domain for over two years.
