- USD demand pickup helps USD/JPY to trade up.
- Falling bond yields weigh on the dollar.
- The US gets the much-awaited fiscal stimulus.
USD/JPY trades in a range, with modest gains, below mid-103.00s. The pair had yesterday lost around 60 pips from the intraday high, but managed to pull up today into the green as investors bought dollars on fears that the new strain of coronavirus might slow the current global economic recovery.
Market participants generally prefer the haven-linked US dollar in times of heightened anxiety.
The US House of Representatives successfully passed the long-awaited fiscal stimulus bill on Monday. Totalling 892 billion dollars, it came along with another 1.4 trillion dollars government funding measure for one year. The developments weighed on the US Treasury yields as well as the US dollar, keeping the USD/JPY below mid-103.00s and within the previous day’s trading range.
The inability of the pair to attract follow up buying could be an indication that the bearish trend is still in play. Traders might wait for confirmation regarding the base formation near 103.00 mark.
The market participants will eye the US economic docket as the final Q3 GDP report, Richmond Manufacturing Index, Conference Board’s Consumer Confidence Index and Existing Home Sales are due today.
The economic releases, along with the pandemic headlines and broad market sentiments, will dictate USD/JPY trading in the day ahead.
At the time of writing, one US dollar buys 103.39 Japanese Yens, up 0.10% as of 11:36 AM UTC.