USD/JPY rebounds above 151.00, on mixed US data, higher US bond yields

• USD/JPY aims higher after recovering from weekly lows, bolstered by an uptick in US Treasury yields and a strong US Dollar.
• The US Dollar to remain on the defensive, after soft US inflation data; speeches from Federal Reserve officials eyed.
• Japan’s Q3 economic contraction supports the Bank of Japan’s dovish stance, while intervention threats limit further depreciation of the Japanese Yen.

On Wednesday, the USD/JPY trimmed some of Tuesday’s more than 0.89% losses and climbed back above the 151.00 figure, after dropping to a weekly low of 150.15. At the time of writing, the pair trades at 151.34, up 0.66%.

USD/JPY recovers from weekly lows, as market eyes Fed speakers, Japanese data

Wall Street finished in the green, while an uptick In US Treasury bond yields, underpinned the major. The US 10-year Treasury bond yield, rose eight basis points, is at 4.539%, while the Greenback (USD) recovered some ground. The US Dollar Index (DXY), which measures the buck’s performance vs. six rivals, prints 0.32% gains, at 104.40.

Data-wise, the US Bureau of Labor Statistics (BLS) showed that prices paid by producers in October dipped compared to last month’s readings and missed estimates. October’s US Retail Sales were mixed, with monthly figures contracting, while annually based stood at positive territory.

Given the backdrop of back-to-back soft inflation data reports, namely CPI and PPI, that would deter the US Federal Reserve (Fed) from raising rates further. Nevertheless, Thursday’s Fed parade continues, led by Lisa Cook, Loretta Mester, John Williams, Christopher Waller, and Michael Barr.

In Japan, the economy contracted -0.5% QoQ in the third quarter, missing forecasts of a -0.1% plunge, justifying the Bank of Japan’s (BoJ) loose monetary policy stance. Even though it would suggest the JPY might depreciate further, intervention threats by Japanese authorities is capping the rally on the USD/JPY.

Ahead in the Asian session, the Japanese economic agenda will feature the Balance of Trade and Machinery Orders. On the US front, Initial Jobless Claims, Regional Fed banks manufacturing indices, along with industrial production, would shed some light, regarding the status of the economy.

USD/JPY Technical Levels