The USD/JPY currency pair today hit new 2-week lows as the US dollar grappled with increased selling pressure and low bond yields. The Japanese yen started gaining against the US dollar late in the Asian session, a trend which continued into the European and American sessions.
The currency pair lost over 70 points from its daily high at the peak of its decline, but has since retraced some of its losses.
The positive Japanese data released during the Asian session might have triggered the currency pair’s decline. The annualized Japanese housing starts data came in at 1.9% for the month of April, exceeding the market expectation of a -1.5% decline. The Japanese small business confidence for May came in at 48.9 versus the previous 48.6. The appeal of the Japanese yen as a safe haven currency might have also triggered the decline as investors’ risk appetite declined.
The negative economic data from the US might have accelerated the decline during the early American session. The US MBA Mortgage Application for May 26 came in at -3.4% versus the previous 4.4%. The Chicago Purchasing Managers Index was recorded at 59.4 exceeding the expectation of 57 and the previous 58.3. The pending home sales for April also did not meet expectations as they were recorded at a monthly figure of -1.3% versus the expected 0.5% increase.
The currency pair’s future performance is likely to be affected by the release of US ADP employment change report and the jobless claims data, both scheduled for tomorrow.
The USD/JPY was trading at 110.63 as at 18:13 GMT having dropped from a daily high of 111.22. The CAD/JPY was trading at 81.85 having declined from a daily high of 82.62.
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