- USD/JPY edged lower on Friday, albeit lacked any strong follow-through selling.
- A positive mood around the equity markets undermined the safe-haven JPY.
- A subdued USD demand did little to provide any meaningful impetus to the pair.
The USD/JPY pair traded with a mild negative bias through the early European session, albeit lacked any strong follow-through and remained above weekly lows set on Thursday.
The pair failed to capitalize on the previous day’s modest bounce of around 30 pips and met with some fresh supply on the last trading day of the week following the release of mostly in line Japanese consumer inflation figures.
The Japanese yen got a minor lift after the government stated that the economy has almost stopped deteriorating and raised its assessment in June for the first time since 2018, indicating that the worse of coronavirus is already over.
This was partly offset by dovish sounding Bank of Japan monetary policy meeting minutes, which revealed that a few board members said the central bank should aggressively increase bond buying to keep yield curve stably low.
This comes amid a positive mood around the global equity markets, which undermined the Japanese yen’s safe-haven demand. This, in turn, helped limit any deeper losses for the USD/JPY pair, at least for the time being.
Meanwhile, a subdued US dollar price action, despite a modest pickup in the US Treasury bond yields, did little to influence the momentum or provide any meaningful impetus to the USD/JPY pair.
There isn’t any major market-moving economic data due for release from the US. Hence, the USD price dynamics and the broader market risk sentiment might continue to play a key role in influencing the USD/JPY pair’s momentum on the last day of the week.
Technical levels to watch
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