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  • USD/JPY extends its daily slide after breaking below 107.00.
  • US Dollar Index slumps to 96.50 area in early American session.
  • Markit Manufacturing PMI in US is expected to recover in June.

The USD/JPY pair broke below 107.00 during the European trading hours on Tuesday and extended its slide pressured by the broad-based USD weakness. As of writing, the pair was trading at its lowest level since early May at 106.45, losing 0.4% on a daily basis.

USD selloff intensifies ahead of US data

Although the JPY and the USD both struggle to find demand when market sentiment turns positive, the greenback seems to be facing a heavier selling pressure against its peers on Tuesday. At the moment, the US Dollar Index is down 0.45% on the day at 96.56. 

Reflecting the upbeat market mood, major European equity indexes are gaining between 1.3% and 2.4% while the S&P 500 futures are up nearly 1%, pointing out to a strong opening in Wall Street.

The data from Japan on Tuesday showed that Jibun Manufacturing PMI edged lower to 37.8 in June’s advanced reading from 38.4 but came in better than the market expectation of 36.9. Later in the session, the IHS Markit will release the Manufacturing, Services and Composite PMI figures for the US. 

Previewing the PMI data, “the IHS Markit PMI for manufacturing is forecast to climb to 48 in June from 39.8 in May and the April record low of 36.1 while the services PMI is predicted to be 46.5 in June following 37.5 in May and the all-time low of 26.7 in April,” noted FXStreet analyst Joseph Trevisani. “These first June PMI numbers will tell if the May recovery has staying power. Equities and the dollar are ready to rise, they await a positive answer.”  

Technical levels to watch for