- USD/JPY extends the previous week’s losses on Monday.
- Lower US Treasury yields undermine the demand for the US dollar.
- Yen suffers from its downbeat economic outlook.
The USD/JPY pair trades on a muted tone on the first trading day of the new week. The pair extends the previous week’s losses and remains subdued.
At the time of writing, USD/JPY trades at 109.57, up p.0b8% for the day.
The US Dollar Index (DXY), which tracks the greenback movements against the basket of six majors currencies, retreated from its high near 90.60 on Friday after the disappointing Payroll data. The greenback moved in the tandem with the US benchmark 10-year yields, which traded at 1.56% following the data.
The US economy added 559K jobs in May much below the market forecasts of 650K. That leaves employment about 7.6 million jobs below its peak in February 2020. The readings eased the expectations that the Fed would start tapering soon. This, in turn, lowers the attractiveness of the US dollar.
On the other hand, the Japanese yen broadly gains on its safe haven appeal, despite the depressive economic outlook. The extension of lockdown, as the country is still struggling with the rising coronavirus cases, hinted at a poor vaccine rollout programme. The situation remained critical before the commencement of the Olympics 2021 in July.
As for now, the dynamics around the US dollar continue to influence the pair’s performance for the time being.
USD/JPY Additional Levels
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