- USD/JPY limits gain in the early European session.
- The US Dollar Index remained depressed below 91.40.
- Risk aversion helps the pair hold onto constructive bids.
The USD/JPY pair is accumulating mild gains in the early European session. The pair quickly recovered from the intraday lows of 109.19 and refreshed the session high near 109.40, thus marking a narrow trading range for the pair in the absence of immediate catalysts.
At the time of writing, the USD/JPY pair is trading at 109.40, up 0.06% on the day.
The subdued performance of the US dollar index (DXY) is attributed to the pair’s non-performance. The index remains dressed near daily highs of 109.40 following the lack of traction in US Treasury yields with minimal gains of 0.01%. The comments from US Treasury Secretary Jenet Yellen on rising interest rates and inflation proved to be ineffective as the market digested them.
On the other hand, rising coronavirus cases in Japan are taking a toll on the economic outlook. As reported, Japan might extend the state of emergency in the capital, Tokyo, and other major cities, a move that raises doubts about the planned Summer Olympics.
Traders are looking forward to the release of the US ADP and PMI data for fresh trading impetus.
As for now the dynamics around the US dollar continue to influence the pair’s performance.