US PMI reading pushes USD/JPY to fresh daily peak

Amid a new round of USD purchasing, the USD/JPY quickly recovers from the weekly low. The positive US PMIs support future Fed rate hike predictions and strengthen the US dollar. Spot prices are still on course to post moderate rises for a second straight week.

During the early North American session, the USD/JPY pair draws some dip-buying at the 133.55 area and makes up some of the early territory it lost to the weekly low. Spot prices reach a new daily peak in the 134.30 area, and for the time being, they appear to have stopped this week’s retracement decline from the level that was reached in mid-March.

Following the publication of the US PMI prints, the US Dollar (USD) surges back towards the weekly high, which is viewed as a major reason driving the USD/JPY pair higher.

This past Friday, S&P Global released data showing that the US private sector’s economic activity grew at a faster rate in April, with the Composite PMI increasing to 53.5 from 52.3 in March. Additionally, the manufacturing indicator swings into expansion zone and registers at 50.4, while the services PMI ticks up to 53.7, outperforming consensus expectations.