USD/JPY continues to fall, falling for the sixth day in a row.
Problems with the coronavirus, as well as other viruses The price is weighed down by Fedspeak ahead of the US ADP.
Although the calendar prints from Japan received excellent feedback, they received fewer honors.
Risk catalysts remain in control, while the Delta variation receives more attention.
Heading into Wednesday’s European session, the USD/JPY continues under pressure at 110.50, down 0.05 percent intraday. As a result, the yen pair has dropped for the fifth day in a row amid lackluster markets.
The cautious mood ahead of the US ADP Employment Change and fears about the coronavirus (COVID-19) appear to be taking precedence, while sluggish Treasury rates and no reaction to Japanese data limit the pair’s movement. However, Fedspeak and US President Joe Biden’s proposal for restraints on large corporations have an impact on the USD/JPY exchange rate.
The strong points in Tuesday’s US CB Consumer Confidence and Housing Market figures imply yet another evidence of robust inflation, posing a challenge to the US Federal Reserve’s (Fed) policymakers’ justification of loose money. “Inflation expectations look entrenched,” Fed Governor Christopher Waller said recently in a Bloomberg TV interview, probing the risk-on mindset.
In recent years, the Delta version of the coronavirus (COVID-19) has wreaked havoc in the United Kingdom and Australia. While the United Kingdom has already postponed unlocking plans, Australia has proposed for local lockdowns covering more than 80% of the country’s population. According to Kyodo News, Japan has announced a contribution of one million covid vaccine shots, as well as plans to move the Olympic torch relay off of public roadways.
The Wall Street Journal (WSJ) predicts more difficulties for multinational corporations around the world. “According to people familiar with the plans, the Biden administration is developing an executive order directing agencies to strengthen oversight of industries they perceive to be dominated by a small number of companies, a wide-ranging attempt to rein in big business power across the economy,” said the news.
Stock futures are moderately bid amid these maneuvers, but US Treasury yields oscillate around 1.48 percent, keeping the US dollar index (DXY) afloat near 92.00 by press time.
In terms of the data, Japan’s preliminary Industrial Production for May beyond the 20% predicted and 15.8% ahead of the 22 percent mark, while the Consumer Confidence Index for June surpassed the 34.3 projected and 34.1 previous readings with a reading of 37.4.
While the market’s cautious mindset keeps USD/JPY sellers upbeat, the stronger-than-expected 600K ADP Employment Change for June can jolt purchasers into a consolidation ahead of Friday’s Nonfarm Payrolls report.
Nonfarm Payrolls from ADP Preview: Going against the grain? What is the best way to trade this leading indicator?
USD/JPY is headed for early-month tops around 110.30 after a clear decline past the 10-DMA, although the mid-May high near 109.80 will call into doubt further downside. Recovery rises above the 10-DMA level of 110.55, on the other hand, may take a pause around the June 17 peak of 110.82 before attempting the monthly high of 111.10.
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