USD/JPY loses momentum ahead of 110, trades in upper half of daily range near 109.90
- 10-year US T-bond yield rises more than 1.5% on Thursday.
- Wall Street starts the day in the positive territory.
- US Dollar Index stretches higher above 98.
After failing to take advantage of the broad USD strength earlier this week with the sour market sentiment helping the JPY stay resilient against its major rivals as a safe-haven, the USD/JPY pair gained traction on Thursday and advanced to a weekly high of 109.93 in the last hour before going into a consolidation phase. As of writing, the pair was trading at 109.85, adding 0.25% on a daily basis.
The 10-year US Treasury bond yield, which slumped to its lowest level since September 2017 yesterday to weigh on the strongly correlated USD/JPY pair, reversed its course and was last up 1.52% on a daily basis. Reflecting the risk-on atmosphere, major equity indexes in the U.S. started the day in the positive territory help the pair preserve its bullish momentum.
Meanwhile, the U.S. Bureau of Economic Analysis in its second estimate reported that the real GDP was forecasted to increase by 3.1% in the first-quarter to come in line with the market expectation. The US Dollar Index extended its rally into a fourth day today and was last up 0.12% on the day at 98.25.
In the early trading hours of the Asian session, retail trade, industrial production, and Tokyo CPI data from Japan will be looked upon for fresh impetus. The last data of the week from the U.S. will be the core Personal Consumption Expenditures (PCE) price index, the Fed's preferred measure of inflation. Markets expect the PCE price index to remain unchanged at 1.5% on a yearly basis in April and a lower-than-expected reading could weigh on the greenback.
Technical levels to watch for