USD/JPY clings to modest recovery gains above 109.50 ahead of US data

  • 10-year US T-bond yield rebounds from multi-week lows.
  • US Dollar Index stays directionless near mid-97s.
  • Coming up: Weekly jobless claims, housing starts and building permits data from the U.S.

The USD/JPY pair came under a modest pressure during the Asian session on Thursday as reports of the U.S. banning Chinese tech-giant Huawei escalated, once again, the geopolitical tensions. After slumping to 109.30 area and moving in a tight range near that level, however, the pair gained traction in the last hour and turned positive on the day. As of writing, the pair was up 0.08% at 109.67.

The 10-year US Treasury bond yield, which slumped to its lowest level since late March at 2.340% earlier in the day, also took advantage of the slightly-improved market sentiment and turned positive on the day to help the pair push higher. Moreover, major European equity indexes are posting gains in the day, confirming the risk-on atmosphere. Similarly, the S&P 500 Futures is adding 0.3% to point to a positive Wall Street opening.

In the second half of the day, weekly jobless claims, housing starts, building permits data and Philly Fed Manufacturing Survey from the U.S. will be looked upon for fresh impetus. Investors will also be paying close attention to fresh developments surrounding the U.S.-China trade dispute and the market’s risk perception. The Japanese economic docket on Friday will feature the Tertiary Industry Index, which is likely to be ignored by the market participants.

Technical levels to watch for