USD/JPY Tests New Lows as Japanese Yen Strengthens Against US Dollar

The USD/JPY currency pair today tested new lows as the Japanese yen strengthened against the US dollar during the North American session. Although the pair gained momentum after the release of positive US personal income and outlays data, the currency pair was trading lower as the yen rallied against the greenback.

The currency pair rallied to a high of 111.23 after the release of positive US economic data early in the American session, but fell to a new low of 110.63 later in the day. The US dollar was weaker against the Japanese yen given that the US Dollar Index was trading at 97.34 at the time of writing, which is below its opening price of 97.63 .

The yen’s rally against the US dollar was largely triggered by the falling euqity prices on Wall Street as the Dow Jones Industrial Average had fallen by 0.20%, while the Nasdaq had fallen by 0.10% at the time of writing. The bond market was also performing poorly as the yields on the 10-year bonds had fallen to 2.227%, which was its lowest level in a week.

The positive US personal income and outlays data released by the Bureau of Economic Analysis came in at a monthly figure of 0.2%, exceeding the market consensus of 0.1%. The annualized figure met expectations as it was recorded at 1.5%.

The currency pair’s future performance is likely to be affected by the release of Japanese housing starts data and the US pending home sales data, both scheduled for tomorrow.

The USD/JPY was trading at 110.75 as at 17:16 GMT having recovered from a daily low of 110.63. The EUR/JPY was trading at 123.81 having risen from a daily low of 123.12.

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