Title: USD/JPY: Sluggish yields, pre-data anxiety probes buyers at the highest levels since 1990

October 14, 2022 12:26 AM ET

By: AnalysisWatch

USD/JPY is hovering around the mid-147.00s as bulls take a breather around the 32-year high at the start of Friday's European session. This marks an eight-day uptrend for the yen pair, although sluggish Treasury yields are challenging the pair's buyers at press time.

US 10-year Treasury yields fell further late Thursday from their highest levels since October 2008, while two- and 30-year bond coupons also fell from multi-year highs.Still, Asian equities were up at the time of this article's publication.

It should be noted, however, that market expectations for China and UK stimulus measures, as well as the recent decline in the U.S. dollar, appear to be challenging USD/JPY buyers in the quiet trading hours of the day. In addition, cautious market sentiment ahead of U.S. retail sales for September, as well as preliminary results from the Michigan Consumer Sentiment Index (CSI) and the University of Michigan's (UoM) 5-year consumer inflation expectations for October are weighing on yen rates.

Fears that Japanese policymakers are secretly defending the yen and the Bank of Japan's (BOJ) rejection of higher interest rates as proposed by the International Monetary Fund (IMF) are also limiting the immediate movement of the USD/JPY pair.

Looking ahead, updates regarding market intervention in Japan, China, and the UK could entertain USD/JPY traders ahead of the aforementioned US data.

Considering that recent US inflation failed to underpin the strength of the US dollar, the upcoming data should be taken with a pinch of salt.