USD/JPY clings to daily gains near mid-107s ahead of US data
- 10-year US T-bond yield rebounds following the sharp drop below 2%.
- Greenback fluctuates in a narrow band above 96.50 handle.
- Coming up: Existing home sales, Markit Manufacturing and Services PMI reports from the US.
The USD/JPY pair lost 80 pips on Thursday and posted its lowest daily close since early January at 107.30. Although the pair extended its slide in the early Asian session toward 107, it staged a recovery ahead of the American session and was last seen trading at 107.50, adding 0.17% on a daily basis.
A more-than-1% increase in the 10-year US Treasury bond yield seems to be helping the pair rebound on Friday. However, investors are paying close attention to headlines surrounding the U.S.-Iran tensions and any fresh developments hinting at a further escalation in the conflict in the Middle East could cause the market sentiment to turn negative and help the JPY find demand as a safe-haven and outperform its rivals.
In the second half of the day, the IHS Markit will release the Manufacturing and Services PMI (preliminary) figures for the U.S. Later in the session, Cleveland Fed President Loretta Mester and Fed Governor Lael Brainard will be delivering speeches.
Earlier today, Richard Clarida, Vice Chair of the Fed Board of Governors, told Bloomberg that there was a broad agreement that the case for a looser Fed policy had increased to echo Chairman Powell's comments. As investors are waiting for the next fundamental drivers, the US Dollar Index is virtually unchanged on a daily basis at 96.60.
Technical levels to watch for