USD/JPY erases daily gains, trades near 142.50
12.09.2022, 14:52

USD/JPY erases daily gains, trades near 142.50

  • USD/JPY erased its daily gains during the European trading hours.
  • The dollar struggles to find demand as US stocks push higher.
  • Focus shifts to US 10-year Treasury note auction.

USD/JPY gathered bullish momentum at the beginning of the week and climbed to the 143.50 area before reversing its direction during the European trading hours. As of writing, the pair was trading at 142.50, where it was virtually unchanged on a daily basis.

The risk-positive market environment during the Asian session made it difficult for the JPY to find demand. Japanese Deputy Chief Cabinet Secretary Seiji Kihara reiterated that the government will take necessary steps to counter excessive declines in the yen but the pair showed no reaction to these comments.

In the European morning, the greenback came under heavy selling pressure amid falling US Treasury bond yields and caused USD/JPY to turn south. 

The US Dollar Index, which tracks the dollar's performance against a basket of six major currencies, was last seen losing 0.7% on the day at 108.22. In the meantime, Wall Street's three main indexes are up more than 1% after the opening bell, not allowing the USD to stage a rebound.

In the absence of high-impact macroeconomic data releases, investors will pay close attention to the outcome of the 10-year US Treasury note auction that is scheduled to take place at 1700 GMT. In case the high-yield comes in below the previous auction's 2.755%, the 10-year US T-bond yield could stretch lower and open the door for additional losses in USD/JPY.

Technical levels to watch for

 

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