fundamental News - USD/JPY

USD/JPY extends the previous session’s declines on Tuesday in the early Asian trading session. The pair stays in a relatively narrow price band, after hovering near the daily highs in the  US session. At the time of writing, USD/JPY is trading at 114.27, down 0.02% for the day.

The US benchmark 10-year Treasury bond yields trade at 1.59% after rising  near 1.61% on Monday, levels last seen in early June. As the recent, Retail Sales and Initial Jobless Claims suggest ongoing economic recovery despite persistent pricing pressure. The greenback remains steady around 94.00.

The dollar dipped in US session after data showed production at U.S. factories fell by the most in seven months in September, erasing earlier gains on expectations that the Federal Reserve may be closer to raising interest rates than previously expected.

U.S. manufacturing output was hurt as an ongoing global shortage of semiconductors depressed motor vehicle output, providing further evidence that supply constraints were hampering economic growth.

Supply disruptions are adding to concerns about high inflation and adding to expectations that the U.S. central bank will need to act to stamp out price increases.

"Prospects for global central banks to be more aggressive to counter growing inflation fears may put the USD under some pressure, though the Fed in turn may act sooner than previously expected, supportive of the dollar," said Ronald Simpson, managing director, global currency analysis, at Action Economics.

The dollar fell 0.02% to 93.95 against a basket of currencies USD. It had earlier reached 94.17 as U.S. Treasury yields increased.

Technical analysis
The usd/jpy consolidating above the 20-SMA 114.025 on the 4-hourly chart, only a re-test of the Friday high at 114.458 will signal resuming of the bull. A trade below the 20-SMA will lead the pai back to the 50-SMA at 113.204.

expectation today: neutral



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