USD/JPY bounces off from multi-month support near 109.20 on steady USD

• USD/JPY recovers from the previous session’s decline on Wednesday.
• US Dollar Index remains steady near 93.00 despite dismal economic data.
• The Yen losses grounds on renewed coronavirus concerns.

The USD/JPY pair edges higher in the middle of the week in the initial Asian trading hour. After testing fresh daily lows near 109.10  in the overnight session, USD/JPY bounce back above 109.50.

At the time of writing, USD/JPY is trading at 109.60, up 0.03 % for the day.

The US Dollar Index (DXY), which tracks the performance of the greenback against its six major rivals, trades higher above 92.70 with 0.13% gains amid falling US Treasury yields.

The benchmark 10-year Treasury yields remain lower at 1.24% following weaker Retails Sales data. The readings fell 1.1% in July as compared to the market consensus of 0.3% drop. 

Meanwhile, US Federal Reserve Chairman Jerome Powell warned about the recent surge in the impact of the COVID-19 case on the US economy. The greenback remained unfazed by the comments.

On the other hand, the Japanese yen gains were evaporated on the rising of the Delta variant of the coronavirus.

As for now, investors wait for the Japanese Merchandise Trade Balance data, the US Building Permits, and Housing Starts to gauge the market sentiment.

USD/JPY additional levels