USD/JPY trades with modest gains, eyes 110.70 ahead of US CPI

USD/JPY extends gains in the initial Asian trading session on Wednesday. The strong buying pressure in the US dollar sponsors the performance of the pair.

At the time of writing, USD/JPY is trading at 110.57, up 0.01 % for the day.

The US Dollar Index, which tracks the performance of the greenback against its six major rivals, trades above 93.00 with 0.15% gains tracing the higher US Treasury yields.

The US 10-year benchmark Treasury yields jumped to 1.35% on the growing expectations of sooner-than-expected US Federal Reserve threshold of timing to reduce its monthly bond-purchasing program.

Meanwhile, Chicago Fed President Charles Evan said he would wait for more job reports before taper decision. His comments were diverging from other Fed official’s hawkish stance.

In the latest development, US Senate passed the massive $1 trillion infrastructure plan, further adding to the optimism surrounding the greenback.

The number of Americans filing new claims for unemployment benefits declined to 385k in July, broadly in line with market estimates of 384K whereas the US posted the largest trade deficit on record in June at

On the other hand, the Japanese yen remained weaker against the greenback as the number of new coronavirus cases reported continued to recorded above 10k.

Meanwhile, Japan’s bank lending edged higher in July at the slowest annual pace in the last nine years.

As for now, investors wait for the US Core Inflation Rate and Inflation Rate to gauge the market sentiment.

A higher reading would strengthen the prospects of early Fed tapering, which could boost the US dollar appeal as an attractive investment.

USD/JPY additional levels