Usdjpy Recovers After Touching Lows

last updated on

Usdjpy Recovers After Touching Lows

USD/JPY Recovers After Touching 144.44 Amid Rising T-Bond Yields

It appears that the Greenback's weakness against the Japanese Yen has finally ended as the USD/JPY pair has recovered from 144.44 (a 3-week low). This comes at a time when a lot of economic news from the US side is already released.

The chief factors that caused the USD/JPY to switch from bearish to bullish are advances in the US bond yields and above-expectations economic data coming from the USA. For now, the USD/JPY trades near 146.19, a long way from the low 144.44.

The latest data from the USA for the week was the NFT August's report, which remained above estimates. For the most part, the report was good, but the USD didn't receive as much of a jump as initially expected.

Better Than Expected ISM PMI Helps The USD

However, it was the manufacturing business activity (August's PMI For ISM Manufacturing) that came out to be 47.6, which is a jump from last month's 46.4. But that's still not good if we consider the fact that business activity from the manufacturing sector is still showing contraction rather than sustainable growth.

On the Japanese side, the manufacturing sector also continues to face contraction. According to experts, the real reason behind this is the costs if we take a closer look at the manufacturing PMI from Jibun Bank.

Based on this fundamental setup, it appears that the USD/JPY will likely stay bullish. However, let's not forget that the Japanese authorities can also intervene in the FX markets and put an end to this bullish trend.

Although Japanese FM has made it clear that it should be the markets to set the currency rates, however, there's always an open door if the exchange rate becomes too uncomfortable for the central bank.

Based on the recent price action, any move below the 144.53 will lead to a more deeper correction in the USD/JPY. However, any move above the 145 will mean that the bulls have established control and will push the pair towards the 146.00 resistance.

Trending Stories