USD / JPY Consolidates Below 109.50 Ahead of US Retail Sales
- The USD / JPY extends yesterday’s lull and remains muted on Thursday.
- The US dollar index slips below 92.50, still recovering from colder-than-expected US inflation data.
- The Japanese yen is benefiting from its appeal as a safe haven against a backdrop of declining investor risk appetite.
The USD / JPY fell slightly on Thursday in the first Asian trading session. The pair is trading in a very narrow trading range without significant pull. As of this writing, USD / JPY is trading at 109.35, down 0.01% for the day.
The greenback’s depreciating movement is keeping the USD / JPY on the edge. The US Dollar Index (DXY), which tracks the performance of the dollar against the basket of six major currencies, is trading below 92.50 with losses of 0.16%.
Benchmark 10-year US Treasury yields rose 2.2 basis points to 1.30% ahead of critical retail sales data, which is due to be released today. US industrial production rose 0.4% in August from 0.8% in July, while business activity in NY jumped 34.3 in September from 18.3 in August, well above forecast from the market of 18.
Meanwhile, the U.S. House of Representatives committee approved legislation to raise taxes for the rich and corporate, but remained divided over a provision to lower drug prices.
On the other hand, the Japanese yen is gaining on its appeal as a safe haven. A Reuters poll found that a majority of Japanese companies believe the world’s third-largest economy will return to pre-pandemic levels in 2022.
On the data front, Japan recorded a trade deficit of 635.40 billion yen in August. The negative reading capped the gains of the national currency. For now, traders are waiting for US retail sales data and initial jobless claims to gauge market sentiment.