USD/JPY in search of a firm direction, stuck in a range above 107.00 mark
- USD/JPY lacked any firm directional bias and remained confined in a range on Friday.
- A broad-based USD weakness, sliding US bond yields capped any intraday move up.
- The upbeat market mood undermined the safe-haven JPY and extended some support.
The USD/JPY pair seesawed between tepid gains/minor losses through the early North American session and was last seen trading in the neutral territory, around the 107.20-25 region.
A combination of diverging forces failed to assist the USD/JPY pair to build on the previous day's positive move, rather led to a subdued/range-bound price action on the last day of the week. The US dollar witnessed some heavy selling amid a strong pickup in the shared currency.
This coupled with a fresh leg down in the US Treasury bond yields further undermined the greenback and capped any attempted positive move for the USD/JPY pair. However, a positive mood around the equity markets dented the Japanese yen's safe-haven status and helped limit the downside.
The likelihood of additional stimulus coupled with the latest optimism about a coronavirus vaccine helped revive investors' appetite for riskier assets. Traders largely shrugged off concerns over the resurgence of COVID-19 cases across the world and worsening US-China relations.
Meanwhile, the USD remained depressed following the release of US housing market data, which showed that Building Permits rose by 2.1% June. Further details revealed that Housing Starts in the US surged by 17.3% during the reported month, though did little to provide any impetus.
Friday's US economic docket also highlights the release of Prelim Michigan Consumer Sentiment Index, though is unlikely to provide any meaningful impetus. Nevertheless, the USD/JPY pair remains well within a familiar trading range and seems poised to end the week with modest gains.
Technical levels to watch