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Jun 18 - 01:55 PM

USD/JPY - COMMENT-USD/JPY Resists Gravitational Pull From US Yields

By Justin Mcqueen  —  Jun 18 - 12:20 PM

USD/JPY traded modestly firmer during Tuesday’s session but stopped short of hitting its post-BoJ high at 158.26, with mixed signals emerging from U.S. data and risk sentiment.

Despite softer than expected U.S.
retail sales
data prompting a pullback through 158, dips remain shallow in the pair.
This will likely persist as long as U.S. stocks continue to print fresh record highs.

As a result of the drift higher in stocks, USD/JPY has resisted the gravitational pull from U.S. yields, which is somewhat of a concern for the dollar.
For USD/JPY, the direction of Treasury yields likely suggests that upside in the pair may be harder to come by going forward.

That said, unless equities take a turn lower with Treasury yields, the path of least resistance remains on the topside for USD/JPY, particularly as the VIX continues to bobble around the lows.

In any case, a better expression of playing yen upside is likely against the euro in the lead up to the first round of the French parliamentary elections on June 30.

For more click on FXBUZ

Source:
Refinitiv IFR Research/Market Commentary

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