USD/JPY struggles near 114.00 ahead of US PMI

• USD/JPY remains muted on the last day of the week in the initial Asia session.
• The US dollar trades below 94.00 tracks higher US T-bond yields.
• The Japanese yen gains amid a risk-off mood.

USD/JPY continues to extend the previous session’s sluggish momentum on Friday. The pair stayed in a relatively narrow price band of 114.00 and 114.50. At the time of writing, USD/JPY is trading at 114.01, up 0.05% for the day.

The US benchmark 10-year Treasury bond yields trade at 1.69%,  following a better-than expected jobless claims data.  Investors continue to anticipate the Fed’s tapering next month tracing strong corporate earnings, which boosted hopes of a continued economic recovery. The US Initial Jobless Claims reported at 290K below the market forecast of 300K. 

Atlanta Federal Reserve President Raphael Bostic said he expected an interest rate hike in the later part of 2022 amid higher inflation concerns as well economic growth.

On the other hand, the Japanese yen managed to gain on the back of its safe-have appeal. Investors' sentiment was dented following the renewed China’s Evergrande default risk. In addition to that,  the US is planning to hold a virtual meeting between US President Joe Biden and China’s President  XI-jinping. It is worth noting that, S&P 500 Futures is trading at 4,531, down 0.23% for the day.

As for now, traders are waiting for Japanese Inflation data, US Markit Manufacturing Purchasing Managers Index (PPI)  to gauge the market sentiment.

USD/JPY additional levels