- USD/JPY saw dip-buying prior to 104.00 .
- A mild uptick in the stock markets undermined the safe-haven JPY.
- A sudden pickup in the US bond yields remained supportive of the uptick.
USD/JPY picked up from 50 pips from the intraday nadir before hitting the daily high around 104.65 early in the US session.
Resilience was still seen at lower levels and dip-buying seen ahead of the 104.00 round-figure mark, even though demand for the US dollar was softening. US political jitters over the US presidential election next week has kept USD buyers on the side lines or encouraged profit taking.
Negativity was offset by a reasonable rebound in the US stock markets, which undermined demand for the safe-haven Japanese yen. Buyers then took additional cues from a sudden jump in US Treasury bond yields. This, plus anxieties over the potential economic impact from renewed COVID-19 restrictions helped cap the USD decline.
Friday’s US economic data failed to impress the USD buyers or drive the USD/JPY as seen through a lack of strong follow-through buying, suggesting a cautious approach before placing any buy trades.
Still USD/JPY has pared the majority of its weekly losses, with a solid base at 104.00 mark. A meaningful breakthrough 104coould open the door to 103.10-103.00