USD/JPY poised to extend gains beyond 109.80 amid renewed USD strength
- USD/JPY kicks off the new trading week with gains on Monday.
- Stronger US dollar contributes to the upside momentum in the pair.
- Yen remains a non-performer amid mixed economic outlook.
The USD/JPY pair extends the previous session’s gains in the initial Asian trading hours.
The pair is consolidating in the broader range of 109.20-109.80 since the previous two weeks.
At the time of writing, USD/JPY is trading at 109.72, up 0.06% for the day.
The US Dollar Index (DXY), which measures the performance of the greenback against its six major currencies touched the one week high of 91.60 on Friday. The US 10-year Benchmark yields retreated to a fresh 3-month low of 1.42% before recouping the 1.45%.
Investors shrug off the inflationary pressure and cheered up on the signs of solid economic growth in the world’s largest economy. In the latest economic data, the University of Michigan’s Consumer Sentiment rose 86.4% in June, much above the market expectations at 84.
The US posted a fiscal deficit of 132b in May as compared to $399b in May 2020.
On the other hand, the Japanese yen lacks behind the investor’s spotlight on the mixed economic state amid signs of poor economic recovery from the policymakers.
Market participants are now bracing up for the Fed monetary policy meeting this week for guidance on rate hike.
In the economic docket, traders will have the opportunity to trace the Japanese Industrial Production data.
USD/JPY additional levels