Home USD/JPY finds support near 108.30, climbs to mid-108s
FXStreet News

USD/JPY finds support near 108.30, climbs to mid-108s

  • 10-year US Treasury bond yield corrects last Friday’s upsurge.
  • US Dollar Index consolidates last week’s gains, stays above 97.20.
  • Machinery orders in Japan declined more than expected in May.

After posting weekly gains for the second straight week, the USD/JPY pair staged a shallow technical correction on Monday but didn’t have a difficult time finding support near 108.30. As of writing, the pair was posting modest daily gains at 108.53.

Earlier today, Japan’s Cabinet Office reported that machinery orders in May declined by 7.8% on a monthly basis following April’s 5.2% growth and missed the market expectation for a decrease of 4.7%. Other data revealed that bank lending increased by 2.3% on a yearly basis in June to fall short of analysts’ estimate of 2.8%. Nevertheless, investors largely ignored these data at the start of the week as they remain focused on the Fed’s policy outlook.

Following the strong U.S. employment report on Friday, markets are trying to figure out the number of rate cuts the Fed is willing to execute. Goldman Sachs analysts said that they saw a 60% chance of a 25 basis points cut in July and a 15% chance of a 50 basis cut while seeing the odds of the bank keeping the rate steady at 25%.

There won’t be any significant macroeconomic data releases in the remainder of the day and the pair is likely to continue to fluctuate in its daily range.

Meanwhile, the 10-year US T-bond yield, which gained more than 4% on Friday, was last down nearly 1% on the day, capping the pair’s upside for the time being.

Technical levels to watch for

 

FX Street

FX Street

FXStreet is the leading independent portal dedicated to the Foreign Exchange (Forex) market. It was launched in 2000 and the portal has always been proud of their unyielding commitment to provide objective and unbiased information, to enable their users to take better and more confident decisions.