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USDJPY persists over 140.00 amid robust Japanese inflation as US Treasury yields recover from a six-week low
USDJPY displays a three-day upswing and anticipates its first weekly gain in five weeks. Since 1982, Japan's National CPI excluding Food has increased the most. Fed hawkishness causes the 10-year US Treasury rate to rise from a six-week low. In volatile markets, the light calendar might limit the Yen pair's movement when bulls demonstrate strength.
During Friday's opening hour of trading in Tokyo, USDJPY defended the last comeback near 140.40 in an effort to reverse a five-week decline. In doing so, the Yen pair disregards the robust Japanese inflation data amid rising US Treasury yields.
Japan's news stories The National Consumer Price Index (CPI) increased 3.7% annually, compared to 2.7% projected and 3.0% previously. Importantly, the National CPI excluding Fresh Food, also referred to as the Core CPI, increased at the fastest rate since 1982.
In light of the fact that various Bank of Japan (BOJ) executives, including Governor Haruhiko Kuroda, have recently supported the Japanese central bank's easy-money policies, USDJPY purchasers may have paid little attention to the inflation figures.
Elsewhere, 10-year Treasury yields rebounded from a six-week low due to aggressive Fedspeak and stronger prints of top-tier data, largely ignoring the mixed prints of second-tier data.
The US Philadelphia Fed Manufacturing Index plummeted to -19.4 on Thursday, compared to -6.2 market expectations and -8.4 previously. In addition, Housing Starts decreased by 4.2% month-over-month in October, following a 1.3% loss in September, while Building Permits decreased by 2.4%, compared to a 1.4% increase in the previous month. In addition, Jobless Claims decreased to 222K for the week ending November 11 compared to 225K anticipated and an upwardly revised 226K the previous week.
Nonetheless, October's robust Retail Sales and Producer Price Index (PPI) figures appeared to favor Fed hawks. However, James Bullard, president of the Federal Reserve Bank of St. Louis, stated on Thursday that the US Federal Reserve's (Fed) monetary policy is not currently considered to be sufficiently restrictive to cut inflation. Neel Kashkari, president of the Minneapolis Federal Reserve Bank, made his most recent remarks on the same line. "With inflation still high and monetary policy tightening already in the works, it is unknown how high the US central bank will have to hike its policy rate," said Kashkari of the Federal Reserve.
In addition, growing tensions between Russia and Ukraine as a result of missile strikes on Poland, as well as rising Covid counts in China, support the safe-haven demand for the US Dollar and boost the USDJPY pair.
A lack of important data/events in the near future may pose a challenge to momentum traders, although risk aversion and stronger rates may support USDJPY bulls.
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