- USD/JPY consolidates gains in the Asain session.
- Weaker USD weighs on the pair.
- Japan Economic index, US CPI data in focus for economic data.
The sudden buying interest in the US dollar keeps USD/JPY higher in the Asain session. The pair trades near the session’s high and accumulates a 30 pip movement from the lows of 108.60.
At the time of writing, the USD/JPY pair is trading at 108.82, up 0.19% on the day.
The US dollar index (DXY), which tracks the movement of the greenback against the six major rivals, lacks the strength and remains at the multi-month on Tuesday. US Treasury yields are slightly higher at 1.62% following a solid three-year note auction on Tuesday, and 10-and 30-year note offerings later in the week.
The US dollar still faces heat from the disappointing US NFP data. Despite US job opening data hitting a record high in March, job openings rose by 597K to 8.123 million, well above the market expectations at 7.5 million. The data aids the US dollar to recover from 89.98 multi-month lows.
The Federal Reserve (Fed) official’s comments on inflation and the US job creation, cemented the outlook of an extended era of easing monetary policy with no interest rate hike expected sooner.
On the other hand, the Japanese yen struggles with domestic issues on rising coronavirus infections. The Bank of Japan (BOJ) policymakers warned of the risk to the recovery as the pandemic curbs negatively impact service consumption, and said the economic recovery is backed by external demand. The not so optimistic outlook for the Japanese yen provided a cushion for the pair.
In Addition to that, the geopolitical uncertainty over Israel and Palestine boosted the demand for the US dollar as a safer asset in the time of uncertainties.
As for now, traders turn their attention to the release of the Japanese Leading Economic Coincident Index PREL for March. The major area of focus would be the US Consumer Price Inflation (CPI) data as the deviation in the reading could negatively impact the pair.