The US dollar traded high against the Japanese Yen on Tuesday and is struggling at the key 115.00 psychological level during the Asian Session Wednesday.
The dollar had inched up on Wednesday due to a recent rally in shares showing signs of petering out, However holiday-thinned trading meant markets were showing little real direction.
Many traders having taken time off for Christmas or the end of the year, analysts said it was hard to read too much into the moves. The Market is taking clues from the optimism surrounding the South African covid variant, namely Omicron. The diminishing fears over the virus gives confidence among traders about the global recovery.
The dollar was also favored by a rise in two-year Treasury yields which hit 0.758% on Tuesday, a near two-year high, before slipping marginally to 0.7461%.
Elsewhere, The Fed is widely expected to begin hiking rates before several other major central banks such as the European Central Bank, and this has helped the dollar index to have its best year in 2021 since 2015.
On the other hand, Unemployment Rate of Japan grew to expectation of 2.8% from last month figure of 2.7% whereas Jobs/Applicants Ration also meet the expectation of 1.15.
Japan Industrial Production preliminary reading for November showed a jump of 7.2% which is highest since August 2020 and up MoM versus -0.5% market consensus and 1.8% anticipated numbers. The YOY readings for Industrial Production also was favorable which showed a reading of +5.4% figures compared to -5.0% expected and -4.1% previous readouts.
As per Reuters, Japan’s Government Official said, “Industrial output shows signs of picking up.” The diplomat also added, “While the chip shortage’s impact on the supply chain is shrinking, it’s still there.”
USD/JPY 4 Hour Chart:
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