On Friday, July 9, the U.S. dollar yen exchange rate climbed 0.18% with a net increase of 0.20 points and is now trading at 109.99.
The USD/JPY pair modestly bounced back from its daily low and the Japanese yen is now holding onto its gains from its 0.80% rally in the previous session.
An analyst stated that the risk is slanted downside even though the pair has reached oversold conditions in the near term.
On the technical side, the 4-hour chart showed that the pair is under all of its moving averages. It is on the 20 SMA advancing south below the 100 SMA.
Technical indicators slowed down their slides, however, they are still maintaining a modest bearish slope which indicates a usual selling interest.
Another analyst said that the decline in USD/JPY is reversing together with a risk appetite for equities which suggests that there are no wider spillover effects across the market for now.
He added that the same movement was seen in the U.S. 10-year yield which bounced back over 1.3%.
Meanwhile, Japan is imposing a state of emergency in Tokyo next week due to a resurgence of coronavirus cases.
This will likely last until August 22 and will keep the city under emergency measures throughout the Olympics from July 23 to August 8.
However, it is still vague if the pandemic curbs will effectively cap new COVID-19 infections over the summer holiday season.
Additionally, the cabinet office revised down the country’s economic growth to 3.7pc for April 2021 to March 2022 fiscal year compared to the previous projection of 4.1pc growth.
Moreover, the USD was up as investors worried about the global economic recovery from the continued surge of the pandemic.
The Dollar Index which trails the greenback in comparison to its six other rival currencies rose 0.05% to 92.453, however, it dropped from a three-month high.
The AUD/USD traded 0.11% lower to 0.7420 as the Aussie dollar proceeded to its losses following its drop of 0.7% which was its weakest since mid-December 2020 last Thursday.
In addition, Sydney’s current lockdown might be extended as the city struggles to contain its latest virus outbreak.
Consequently, the NZD/USD also subsided 0.19% to 0.6940.
The same with the USD/CNY which plummeted 0.09% to 6.4840 since the Chinese consumer price index grew 1.1% year-on-year in June while contracting 0.4% month-on-month.
Meanwhile, the country’s producer price index gained 8.8% year-on-year.
Moreover, the GBP/USD pair fluctuated 0.07% to 1.3775.
On the other hand, the Swiss franc soared over 1.00% as it held on to its gains from the previous session.