USD/JPY: positive risk tone and softer yen in Tokyo

Currently, USD/JPY is trading at 111.36, up 0.03% on the day, having posted a daily high at 111.40 and low at 111.22.

Wall Street closes little changed after quiet session

USD/JPY opened in Tokyo bid with a positive tone and a rise of 0.1% in the Nikkei 225. This was following Wall Street that close little changed after a quiet session in the US shift. The dollar was based for the second day in a row while yields in the US 10yr Treasuries remained stuck in a 2.14%-2.16%, while 2yr yields slipped from 1.35% to 1.33%.

The Fed fund futures have a December rate hike priced in at around 40%, underpinning dollar strength and the divergence between BoJ/Fed keeps USD/JPY supported within the broader bearish trend this year. The June preliminary Nikkei Manufacturing PMI, that was expected to tick higher from May's figures, came in lower at 52.0 vs 53.1 prior and the 53.4 consensuses. 

USD/JPY levels

From a technical point of view, Valeria Bednarik, chief analyst at FXStreet explained that the chart shows that the price has been contained below its 100 DMA ever since the week started. "Also that the momentum indicator heads higher within positive territory, as the RSI stands flat around its mid-line.  In the 4 hours chart the price is stuck around its 200 SMA, while technical indicators remain flat around mid-lines, giving no clear directional clues."