USD/JPY sinking towards overnight lows

• USD/JPY bears move in and the price heads towards overnight lows. 
• The US dollar is under pressure and markets are risk-off.

USD/JPY is trading at 135.69 and virtually flat for the day as it moves back towards the overnight lows from a high of 135.98. The pair fell to 135.55 on Wall Street but the yen was down 15% against the US dollar for the first six months of 2022, which makes for the worst first-half of year performance for the currency since 2013. 

The yen regathered below the 24-year peak of 137 vs. the dollar although the gap between a hawkish Federal Reserve and a dovish Bank of Japan continues to weigh heavily on the Japanese currency. 

The US dollar, which extended above 105.000 recently, fell sharply with the Yen regrouping as yields drop. The firmness in the greenback rally remains largely intact, however, considering the ongoing worries about a global recession.US economic data on Thursday confirmed the negative bias and the concerns about the US economy that is sinking towards a recession. US stocks dropped Thursday due to consumer spending that rose at half the projected pace for May while Federal Reserve's preferred inflation gauge showed continued signs of a slowdown.

The highlights of Thursday's data schedule were a faster monthly pace of growth in the PCE price index, steady personal income expansion, and slower spending growth. Personal income was up 0.5% in May, right on expectations after a 0.5% gain in the previous month. 

In other data, the Chicago PMI fell to 56.4 in June from 60.3 in May. Other manufacturing data already released have suggested slower growth or outright contraction. The ISM's national index will be released on Friday. Initial jobless claims decreased by 2,000 to 231,000 in the week ended June 25, but the four-week moving average rose by 7,250 to 231,750, continuing the string of gains.