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Title: USD/JPY bear’s return eyes 138.00 on sluggish yields, BOJ chatters ahead of US ADP

August 31, 2022 02:57 AM ET

By: AnalysisWatch

The USD/JPY bears tightened their grip as they hit the daily low of around 138.30 again early Wednesday morning in Europe. The yen-dollar pair breaks a three-day uptrend and returns to its highest level since early July.

Tracking the moves, sluggish yields, firmer Japanese data and concerns about the Bank of Japan's (BOJ) monetary policy change seem to play the main roles. Cautious optimism in the market and concerns about key U.S. labor market data could also put pressure on the price.

Earlier in the day, Japanese industrial production improved to 1.8% in July from -2.6% (expected) and -2.8% (forecast). In the same vein, retail sales figures for the aforementioned period were up 2.4% versus market forecasts of 1.95% and 1.5%.

Elsewhere, 10-year U.S. Treasury yields rose to their highest level in two months, before retreating to 3.10%.

It is worth noting that Junko Nakagawa, a member of the Bank of Japan's (BOJ) Monetary Policy Committee, recently mentioned that he hopes to discuss a policy change in September based on available data.

On the other hand, U.S. consumer confidence improved to 103.2 in August from 95.3 in July, according to the latest Conference Board (CB) survey results. The U.S. Housing Price Index (HPI) rose 0.1% month-over-month in June, compared to a 1.3% increase in May and the market expectation of a 1.1% increase.

In addition, the S&P/Case-Shiller house price index decreased by 18.6% in the last month, compared to 19.5% (expected) and 20.5% (previous). It should be noted that the number of job openings in the U.S. (JOLTS) increased to 11.239 million in July, compared to 10.475 million expected and 11.04 million previously (revised from 10.698 million).

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