The USD/JPY currency pair rallied higher during the European session, reversing the gains made by the Japanese yen after a speech by Bank of Japan Governor, Haruhiko Kuroda. However, the pair erased most of its gains during the American session after the release of weak US housing starts data.
The currency pair rallied higher during the European session to hit a high of 113.72 at 11:00 GMT. However, the pair reversed its gains and sunk to new lows during the American session.
The currency pair erased all the gains made during yesterday’s session as the US dollar weakened against the Japanese yen. The yen’s rally against the greenback could largely be attributed to the rally in US bond yields and the decline in the US stock indices. The decline in the US Dollar Index (DXY) was also a major contributor the yen’s strength as the DXY was trading below its opening price of 98.88 for most of the day.
The disappointing US housing starts data also contributed to the pair’s decline as April’s housing starts came in at -2.6% versus the expected 3.7%. The US housing starts data for April also recorded a decline of -2.5% versus the expected 0.2%. The positive industrial production and manufacturing production data did little to lift the greenback.
The USD/JPY currency pair’s future performance might be affected by the release of the Japanese monthly and annualized machine order for March, both scheduled for release at 23:50 GMT.
The USD/JPY was trading at 113.21 as at 17:02 GMT having hit a daily low of 112.93. The CAD/JPY was trading at 83.29 having hit a daily low of 82.99.
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