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The USD/JPY recorded advances for a fifth straight day, reaching a peak just shy of 140.40. The second week of July saw a slowdown in Jobless Claims, which fueled an increase in US rates. The Fed Survey and Existing Home Sales in Philadelphia produced subpar results. The pair is trading at 140.19 at the time of writing.
The USD gained ground versus the majority of its competitors on Thursday, including the EUR, GBP, CHF, and JPY. The USD, as measured by the DXY index, rose to its highest level in seven days at 100.80 thanks to lower Initial Jobless Claims, which also fuelled an increase in US bond yields. Investors evaluate US middle-tier data. All eyes are on the inflation figures from Japan.
The Philadelphia Federal Reserve Manufacturing Survey, on the other hand, revealed unsettling findings as its index dropped more than anticipated, finishing at -13.5 vs. the consensus of -10. Additionally, the US Existing Home Sales data for June revealed deterioration after the dismal housing data released on Wednesday. The data revealed a 4.16M decline and a 3.3% MoM contraction in June.
However, investors are paying more attention to the Initial Jobless Claims statistics for the second week of July, which were lower than anticipated. In contrast to the 242,000 projected and the prior figure of 237,000, the number of people applying for unemployment benefits came in at 228,000.
Overall, US Treasury yields increased. The 2-year yield has increased by almost 2% to 4.88%, while the 5- and 10-year yields have increased by more than 2% to 4.10% and 3.84%, respectively. Prior to the Federal Reserve (Fed) meeting next week, markets primarily discounted a 25 basis point increase, and World Interest Rate Probabilities (WIRP) continues to indicate that there are slim chances for another hike after July.
Investors on the Japanese side will be looking at June’s inflation data. While the Core measure is predicted to have slightly slowed to 4.2%, the headline Consumer Price Index (CPI) is anticipated to have increased to 3.5% YoY in June.
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