USD/JPY clings to near multi-week high around 110.40 amid higher US Treasury yields
- USD/JPY remains muted on the first trading of the week in the initial Asian session.
- Higher US Treasury yields underpin the demand for the US dollar.
- US Dollar Index rises above 92.70 with steady gains.
After witnessing spectacular gains in the previous week, USD/JPY kickstarts the fresh trading week on a muted note. The pair remarkably moved from the lows of 108.70 to touch the high near 110.40 in the last trading week.
At the time of writing, USD/JPY is trading at 110.25, up 0.01 % for the day.
The US benchmark 10-year Treasury yields advanced to 1.30% on improved risk sentiment post-upbeat Nonfarm Payroll data. The US economy added 943k jobs, much above the market estimates of 870k jobs whereas the jobless rate declined 5.4% in July, below the market consensus of 5.7%.
The US Dollar Index (DXY), which tracks the performance of the greenback against its six major rivals, moves in tandem with the benchmark yields and stands strong above 92.70.
Dallas Federal Reserve President Robert Kaplan reaffirmed its stance on a sooner tapering measure. In the latest development, US Senate inched closer to pass the massive $1 trillion infrastructure bill on Saturday.
On the other hand, the Japanese yen struggled to gain traction on the concerns of the spread of the Delta strain. Tokyo, recorded 4,066 new cases on the last day of the Summer Olympics on Sunday, above 4k cases for the fifth consecutive day.
Yen took a dip as the support for Japnese PM Suga’s administration slides below 30% for the first time since Yoshihide Suga became Prime Minister.
As for now, the dynamics around the US dollar continue to influence the pair’s performance in the short term.
USD/JPY additional levels