USD/JPY remains directionless near 110.50 post mixed Japan data
- USD/JPY continues to trade in a range bound manner as it lacks the strength to move in a directional trade.
- US dollar gains on the concerns of the Delta-variant COVID-19 outbreak in Asia-Pacific
- Yen remains muted on mixed economic data, Consumer Confidence eyed.
After retreating from the YTD high, USD/JPY is consolidating near the 110.50 level. The pair moves in a very narrow trade band with modest gains.
At the time of writing, USD/JPY is trading at 110.81, up 0.03% for the day.
The US Dollar Index( DXY), which measures the performance of the greenback against its six major rivals, rose sharply to one week high on Tuesday. The greenback touched a high of 92.19 as investors rushed to the US dollar.
The rising corona cases in the Asia-Pacific region added to the attractiveness of the US dollar.
The upside movement in the US dollar also traced back to upbeat domestic economic reading. The S&P CoreLogic Case-Shiller 20-city Home Price Index jumped 14.9% above the market consensus at 14.5%.
Meanwhile, the Federal Reserve Bank of Richmond President said that the US has made substantial progress toward its inflation goal to begin tapering talks. The US dollar gained traction following the comments.
On the other hand, the Japanese yen remained grounder after the Retail sales rose 8.2%, beating market expectations at 7.9%, however, gains were offset by the disappointing unemployment reading, which came at 3.0%, above the market consensus at 2.9%.
In the latest economic data, Industrial Production jumped 22.8% in May compared to 15.8% in the same month YoY basis on a low base effect. The readings declined 5.90% in May on an MoM basis, much below the market expectations at 2.4. The pair remains unfazed by the mixed data.
As for now, investors are waiting for the Japan Consumer Confidence Data, Housing Starts and Construction Orders data, US ADP Employment Change, and Chicago PMI to gauge the market sentiment.
USD/JPY additional levels