- USD bearishness pushed the pair down
- JPY also not in favour during upbeat market mood
- Traders look ahead to US ADP report and ISM Non-Manufacturing PMI
The USD/JPY bounced-up 20 pips from its weekly lows and was trading near the day’s high – around the 105.7 mark.
The pair had earlier extended its bearish moves from the 106.45 levels and continued depressed in the first half of the trading action. The better-than-expected US ISM Manufacturing PMI on Monday couldn’t dilute the scepticism regarding the US economy’s recovery, putting the greenback’s strength to the test.
Adding to the trouble for the US economy is the lack of clarity on the US fiscal-stimulus-deal progress. The lawmakers are reportedly far-off from reaching a consensus, even though both Republican and Democratic camps have indicated to work towards having a deal by the end of this week.
Also, it has to be noted that the US Treasury Secretary Steven Mnuchin downplayed the chances of the stimulus to be anywhere near the 3.4 trillion dollars sought by the democrats. Such differences of expectations in both camps exerted pressure on the USD/JPY, balanced by the subdued demand for the Japanese Yen; due to the upbeat mood in pro-risk assets like equities and commodities.
Traders and investors are looking forward to the ADP report on private-sector employment and ISM Non-Manufacturing PMI for July for further action on the pair.