USD/JPY fluctuates in tight range below 106
- 10-year US T-bond yield edges lower on Wednesday.
- US Dollar Index clings to modest daily gains above 98.
- Coming up: Speech by FOMC members Barkin and Daly.
The USD/JPY pair closed the previous day in the negative territory as falling US Treasury bond yields reminded investors of concerns over a recession in the US and provided a boost to traditional safe-havens such as the JPY. With the markets calming down on Wednesday, the pair is moving up and down in a very tight 25-pip range and was last seen trading at 105.78, adding 0.05% on a daily basis.
Subdued market action on Wednesday
Although the 10-year US Treasury bond yield is down more than 1% on the day, this drop seems to be an extension of Tuesday's sell-off and doesn't allow the JPY to capitalize on it.
On the other hand, the US Dollar Index (DXY) is clinging to modest daily gains above the 98 handle as the heavy selling pressure surrounding major European currencies, especially the British pound, helps the Greenback find demand. With the DXY adding 0.1% on the day at 98.10, the pair stays in the positive territory.
Later in the session, Richmond Fed President Barkin and San Francisco Fed President Daly are both scheduled to deliver speeches. The US economic docket won't be featuring any significant macroeconomic data releases. Meanwhile, the S&P 500 Futures is up 0.11% on the day, suggesting that Wall Street's main indexes are likely to open the day modestly higher. In the absence of fundamental drivers, the risk perception is likely to remain as the driver of the pair's action.
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.
