USD/JPY remains strong above 111.10 ahead of key US, Japan data
- USD/JPY remains on the front foot on Thursday.
- Strong US dollar pushes the pair to 15 months high.
- Yen remains sidelined despite upbeat economic data.
The strong buying sentiment in the US dollar pushes USD/JPY to multi-month high. The pair rose to 111.12 after reaching the low of 110.43 comprising a move of almost 90 pips.
At the time of writing, USD/JPY is trading at 111.11 up 0.01% for the day.
The move was primarily sponsored by the strong buying pressure in the US Dollar. The US Dollar Index( DXY), which measures the performance of the greenback against its six major rivals, appreciated 92.35 with 0.34% gains. The levels were last seen in 2020.
Investors rushed to the US dollar amid concerns over the spread of the highly transmissible Delta variant.
Meanwhile, the Federal Reserve Bank of Dallas President Robert Kaplan said he would prefer the Fed to start reducing its support for the economy before the end of the year to avoid abrupt policy tightening. The hawkish comments lift the demand around the US dollar.
On the other hand, the Japanese yen remains pressurized as investors increase their investment in the US dollar. The sentiments were also soured after the Japan Unemployment rate rose 3% in May.
Meanwhile, the Consumer Confidence Index in Japan jumped to 37.4 in June, the strongest reading since February 2020.
The growth differentials in the US and Japan weigh on the prospects of the yen.
As for now, investors are waiting for Japan Tankan Large Manufacturing Index, Jubun Bank Manufacturing PMI, US Initial Jobless Claims to gauge the market sentiment.
USD/JPY additional levels