Bullish USD/JPY traders are attempting to break through barrier as the US dollar strengthens.
The main emphasis and driving forces are the CPI and the Fed in the United States.
Following US dollar rise in the New York session, the price of the USD/JPY is flat in Tokyo as it presses against the resistance of the bearish daily impulse.
With US rates gyrating in response to the market’s reaction to the US Consumer Price Index data that fell short of expectations, USD/JPY was choppy but persistent on the upward.
USD/JPY closed at 110.65, up 25 pips, and is currently trading in a 110.58/69 range.
In June, the US CPI increased 0.9 percent (vs. 0.5 percent predicted and 0.6 percent the month before), bringing the annual rate to 5.4 percent, the most since 2008. The ex-food and energy index increased 0.9 percent month over month and 4.5 percent year over year, reaching its highest level since 1991.
Meanwhile, economists at Westpac have interpreted the impact of yields as follows: “US treasury rates jumped for the third day in a row after data showed CPI rose at its quickest rate since 2008, as well as a poor outcome in the 30-year auction.” The yield on two-year government bonds increased from 0.23 percent to 0.27 percent, while the yield on ten-year bonds increased from 1.34 percent to 1.42 percent.”
The markets will be watching today’s semi-annual hearing before Congress by Federal Reserve Chair Jerome Powell.
The Chair will take questions from the Financial Services Committee of the House of Representatives.
“I’m sure he’ll be questioned about the June inflation figures.” The Federal Reserve will also release its Beige Book, which will provide an update on conditions across Fed districts, according to Westpac analysts./n
