USD/JPY: Consolidates recent gains around 109.00 as Treasury yields ease

USD/JPY reverses early Asian session positive aspects whilst declining in the direction of 109.00 as markets in Tokyo open for Monday’s trading. The danger barometer looks to retrace amid combined indicators regarding the coronavirus (COVID-19) and reflation fears whilst upbeat facts from Japan exert extra draw back strain on the quote.

Japan’s January month Machinery Orders recovered from -5.5% MoM and -0.2% YoY forecasts to -4.5% and +1.5% figures respectively. The statistics backs the modern day rumors surrounding the Bank of Japan’s (BOJ) upcoming plans to drop its six trillion yen ETF purchase target.

On the different hand, the US 10-year Treasury yield appears to have reacted to weekend feedback from Treasury Secretary Janet Yellen who tried to placate bond bears with her sustained rejection of reflation fears. In her ultra-modern interview on the ABC, the ex-Fed Chair said, “Is there a danger of inflation? I suppose there’s a small chance and I suppose it’s manageable.”

It’s really worth citing that the combined worries for the AstraZeneca vaccine, due to Netherlands’ ban on use till March 29 and the drugmaker’s rejection of any blood clotting troubles due to the vaccine, appear to undertaking the risks.

Though, US President Joe Biden’s remarks conveying upbeat consequences from the state-of-the-art digital summit between America, Indian, Australia and Japan liked the optimists. Also on the equal line ought to be the chatters that Tokyo authorities are planning now not to lengthen virus-led emergencies at the stop of this week’s stipulated expiry.

Amid these plays, the US 10-year Treasury yield drops one foundation factor (bp) to 1.625%, after clean the 13-month pinnacle on Friday, which in flip weigh on the US greenback index (DXY) at the week’s start.

Moving on, USD/JPY merchants might also take intermediate clues from China’s January month Retail Sales and Industrial Production however today’s speech by using US President Joe Biden and this week’s Fed assembly will be the key.

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