USD/JPY struggles to extend the bounce above 110.00
- USD/JPY regains 110.00, for how long? Biden’s infrastructure plan uncertainty looms.
- DYX consolidates the downside, Treasury yields remain on the back foot.
- Focus on the US yields, the dollar and fiscal updates amid a data light US docket.
USD/JPY stalls its corrective decline from near one-year highs, as the bulls fight back control amid the upbeat market mood while a pause in the US dollar sell-off also offers some respite.
At the press time, the major trades almost unchanged around 110.20, recovering from a drop to 109.96.
The major tumbled in tandem with the greenback and the Treasury yields on Easter Monday, as thin-trading conditions exaggerated to the downward spiral.
The US currency lost ground a day before after a recent slew of strong US economic data pointed to a faster recovery and drove Wall Street indices to record highs. The improved appetite for riskier assets hammered the safe-haven dollar across its main peers.
Adding to the weakness in the buck, the US Treasury yields retreated amid concerns over the passage of a massive $2.25 trillion infrastructure spending plan in Congress, especially after Democratic Senator Joseph Manchin said that he would not support a 28% hike to corporate taxes.
Looking ahead, the bounce in the spot appears elusive, as the US dollar is likely to resume its decline amid risk-on mood, as the Asian stocks are seen tracking its US peers higher. The futures tied to the S&P 500 futures post small gains to now trade at 4,070.
Also, capping the upside, Japan's real wages rose for the first time in a year in February, which underpins the yen. Japan’s February inflation-adjusted real wages rose 0.2% YoY in February, the government data showed on Tuesday.
The next of relevance for the major remains the price action around the dollar and yields ahead of the US JOLTS job opening data release. Markets will closely follow fresh updates on the US infrastructure plan.
USD/JPY: Additional levels