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USD/JPY rebounds as Treasury yields recover and oil weighs on yen

USD/JPY was around 159.05, up about 0.55% as US 10-year and 30-year yields rose roughly 6 basis points and weekly initial jobless claims fell to 206K.

Reported · Written up by our desk · Major Pairs

The Japanese yen underperformed its major peers as elevated oil prices weighed on sentiment, while the US dollar rebounded after sliding to a three-month low. FXStreet said USD/JPY recovered most of the prior day’s losses and traded around 159.05, up roughly 0.55% on the day.

The greenback found support as US Treasury yields bounced back from Wednesday’s pullback, after the US Treasury Department said it would increase liquidity-support buybacks for longer-dated government securities. FXStreet noted that both the 10-year and 30-year yields were up about 6 basis points on Thursday, and the US Dollar Index rose to around 98.90 after dipping to 98.56.

Weekly US labor data also helped, with Initial Jobless Claims falling to 206K for the week ending August 15, below expectations of 210K and below an upwardly revised prior reading of 212K, according to FXStreet. At the same time, the yen faced longer-term pressure from fiscal concerns and relatively low interest rates, with Japan’s imports and exports hitting record highs in July.

FXStreet added that Japan’s imports rose 27.8% year over year, exports increased 23.2%, and the country posted a ¥634.5 billion trade deficit. Societe Generale strategists said a medium-term yen recovery may be possible, but warned that meaningful improvement could require another round of FX intervention, unless oil prices fall materially and remove the headwind.

Latest closeUSD/JPY 159.31 ▼0.1%|Dollar index 99.64 ▼0.3%

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