USD/JPY eases below 111.00 as USD weakens
- USD/JPY remains under pressure below 111.00.
- Lower US Treasury yields undermine the demand for the US dollar.
- Higher inflation concerns keep USD/JPY on the backfoot.
USD/JPY consolidate losses on the first trading day of the week. The pair fell for the third straight session, after it peaked near 112.00 on Thursaday. At the time of writing, USD/JPY is trading at 110.94, down 0.04% for the day.
The US benchmark 10-year Treasury yields fell 6 basis points to 1.46% as inflationary concerns mounted on expectations of Fed’s tapering could start as soon as November. Both the Consumer Price Index (CPI) and Producer Price Index (PPI) remained higher, which meant companies could pass on some of that pricing pressure to the consumers. The US Dollar Index (DXY), which tracks the performance of the greenback against six major currencies, trades near 94.09 with 0.16% losses on mixed economic data. The ISM Manufacturing Purchasing Managers Index (PMI) rose 61.1 in September above the market consensus of 59.6 whereas the Personal Consumption Expenditure Index (PCE) gained 0.4% in August.
Meantime, the US House Democrats delayed plans to vote on a $1 trillion infrastructure bill.
On the other hand, the Japanese yen gained on its safe-haven appeal following the comments from Japan's ruling Liberal Democratic Party (LDP) Secretary General Akira Amari that Japan will compile a considerably large extra budget immediately after the election. Japan's election is due on or before November 28. On the economic data front, the Consumer Confidence Index jumped 1.1% to 37.8 in September, the strongest reading since February, 2020.
As for now, traders are waiting for the US Factory Orders to gauge the market sentiment.
USD/JPY additional levels