USD/JPY stays directionless near 108.50 mark
- 10-year US Treasury bond yield is erasing Monday's gains.
- Wall Street looks to open the day little changed.
- US Dollar Index rebounds toward mid-98s on Tuesday.
The USD/JPY pair is struggling to make a decisive move in either direction on Tuesday and continues to fluctuate in a very tight range a little above the 108.50 mark. As of writing, the pair was unchanged on the day at 108.58.
On Monday, United States (US) President Donald Trump said the trade deal with China was "coming along great," and White House economic adviser Kudlow noted that December tariff hikes could be eliminated if negotiations with China continued to go well. On the same sentiment, China’s Vice Foreign Minister Le Yucheng on Tuesday said that they achieved "some progress" in trade talks with the US.
Risk-on mood offsets USD weakness
Despite the lack of interest in the Greenback, rising US Treasury bond yields on the back of the upbeat market sentiment at the start of the week made it difficult for the safe-haven JPY to find demand.
Although the 10-year US T-bond yield is retracing Monday's gains on Tuesday, the mood doesn't seem to be turning sour with major European equity indexes posting modest gains. Meanwhile, the S&P 500 Futures is up 0.1% on the day, suggesting that Wall Street's main indexes are likely to start the day either flat or slightly higher. In the meantime, the US Dollar Index is adding 0.14% on the day at 97.46 to help the pair stay in its range.
Existing home sales and the Richmond Fed's Manufacturing Index will be featured in the US economic docket but these data are unlikely to trigger a significant market reaction. Investors will be paying close attention to the Brexit vote later in the day as well.
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.
