USD/JPY clings to gains above 106.50 as markets wait for Fed commentary

• 10-year US Treasury bond yield extends recovery on Friday.
• Beijing is said to planning to announce retaliatory tariffs.
• Coming up: TV appearances by FOMC members and Chairman Powell speech.

The USD/JPY pair is posting small daily gains above 106.50 on Friday but stays relatively calm as investors are staying on the sidelines while waiting for today’s key commentary. As of writing, the pair was up 0.2% on the day at 106.62.

USD stays strong ahead of Fedspeak

Although the disappoint Purchasing Managers Index (PMI) figures for both the manufacturing and the service sectors yesterday weighed on the Greenback, hawkish comments from Philly Fed President Harker and Kansas Fed President George allowed the currency to stay resilient against its major peers. Harker and George both argued that there was no need for further stimulus or an additional rate cut at the current state.  

Later in the day, St Louis Fed President Bullard, Dallas Fed President Kaplan, Cleveland Fed President Mester, and Philly Fed President Harker will be giving interviews on the sidelines of the Jackson Hole Symposium. More importantly, FOMC Chairman Jerome Powell will be delivering his prepared statement at 14 GMT. Ahead of these events, the US Dollar Index is up 0.23% on the day at 98.45.  

Meanwhile, the 10-year Treasury bond yield is rising for the third straight day on Friday and was last up 1.7% on the day. Although  Hu Xijin, editor-in-chief of Chinese and English editions of the Global Times, recently tweeted out that Beijing would soon unveil a plan of imposing retaliatory tariffs on certain US products, the upbeat market sentiment doesn’t seem to be affected.  

Technical levels to watch for