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  • USD/JPY is slightly pressured in a quiet start to Asia.
  • Traders weigh the mixed sentiment from conflicting Fed rhetoric.  

USD/JPY is in a tight range in Asia on Wednesday with the price oscillating between 108.50 and 108.63.  

The greenback has been the best performer in the past number of trading sessions climbing  substantially against all G10 currencies on the day except JPY.  

USD/JPY dropped as far as 108.41 in London trade and remained heavy in New York trade.

US treasury yields continue to retreat as risk-off flows favour the bonds.

US data was disappointing also with the lower-than-expected new Home Sales which  declined 18.2% MoM  in February, well below expectations of a 5.7% drop.

”Part of this drop reflects freezing weather conditions in February reducing activity in some parts of the US, alongside limited supply. The median sales price rose 5.3% YoY,” analysts at ANS Bank explained.  

Meanwhile, the lockdowns in Europe and Fed Chair Powell’s comments downplaying the effects of inflation were thrown into the mix on a choppy day for Wall Street.

The Dow Jones Industrial Average lost 308.05 points, or 0.94%, to 32,423.15 and the S&P 500 fell 30.07 points, or 0.76%, to 3,910.52. The Nasdaq Composite also fell and by 149.85 points, or 1.12%, to 13,227.70.

In contrast to Fed’s Powell,  Dallas Fed’s Kaplan who is a non-voter was  advocating hikes and as one of the Fed officials signalling a hike in 2022 in the dot plot projections.

Kaplan anticipates 6% growth for  2021, unemployment at 4%, inflation between 2.25% and 2.5%, and 10yr yields between 1.75% and 2.00%.

2-year  US government bond yields remained at 0.14% levels, while in the 10-year bond yields falling 7bps to 1.62%.