US Dollar Rebounds Ahead of Global PMIs as Yen Struggles with Oil Headwinds
The Japanese Yen slipped on Thursday as the US Dollar recovered its footing ahead of key economic indicators. The USD/JPY pair traded above 159.00, rebounding from previous losses after a steadier Greenback and firmer US Treasury yields.
US Treasury yields bounced back from Wednesday's drop following the US Treasury's decision to expand its liquidity-support buybacks of longer-dated debt. Strong labor data also contributed to the Greenback's improvement, with weekly Initial Jobless Claims coming in below expectations.
The Bank of Japan is expected to raise rates in September, but recent US data suggest the Federal Reserve may hold off on increasing interest rates next month. Analysts at Societe Generale remain constructive on the Yen over the medium term, cautioning that a durable turn lower in the pair would require either fresh FX intervention or a meaningful drop in oil prices.
From a technical perspective, USD/JPY trades with a mildly bullish near-term bias, holding above both short-term Simple Moving Averages. Initial resistance appears at 159.19, while immediate support is clustered around the short-term averages and horizontal floors.