Japanese Yen slips as firmer yields lift US Dollar ahead of global PMIs
USD/JPY trades north of the 159.00 barrier at the time of writing on Thursday, higher on the day and clawing back most of the previous session's losses. The move owes more to a steadier US Dollar (USD) than to anything out of Japan, with the Greenback recovering after slipping to a three-month low.
Japan's Yen weakened as higher yields bolstered the US Dollar ahead of global PMI releases. The Greenback recovered after hitting a three-month low, following the US Treasury's decision to increase liquidity-support buybacks of longer-dated debt. Stronger-than-expected labor data kept the Federal Reserve's rate-holding case alive.
The US Dollar Index rebounded toward 98.90 after reaching its weakest level since mid-May. However, the Japanese Yen is the weakest among the major currencies due to higher oil prices, Japan's heavy energy imports, and July trade figures showing a large deficit. While the BoJ is expected to raise rates in September, US data suggest the Fed may hold rates and widen the rate gap.
Analysts at Societe Generale see medium-term upside potential for the Yen, but caution that a sustained decline could require either new FX intervention or a significant drop in oil prices. At the 4-hour chart, USD/JPY is at 159.12, slightly bullish with support levels at 159.10 and 159.09, and resistance at 159.19. EUR/USD dropped to below 1.1700 due to the US Dollar's recovery, and investors await Friday's S&P Global Manufacturing and Services PMI releases.
Gold rebounded above $4,500, while Ripple gained over 20% in value, reflecting growing risk-on sentiment in the crypto market.
Written by urgent.news from FXStreet's reporting — not their text. Machine-written — may contain errors; check the original before relying on it.
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