The USD/JPY pair has picked up bids, extending its rebound from a one-month low despite pressure on US 10-year Treasury bond yields. While the yields on the 10-year Treasury bond remain pressured, the two-year counterpart has increased, indicating a mixed outlook for the US economy.
Global Markets Remain Dicey Despite Cooling US Inflation Fears
Despite cooling US inflation fears and easing concerns about the Evergrande crisis in China, global markets remain volatile. This is partly due to the ongoing COVID-19 pandemic and the potential for new variants to emerge.
Japanese Companies Promise Fastest Pace of Pay Hike Since 1997
Major Japanese companies have promised to deliver the fastest pace of pay hike since 1997, in response to Prime Minister Kishida’s call for a 3% increase. The move is aimed at boosting domestic demand and stimulating economic growth.
The Outlook for USD/JPY
The outlook for USD/JPY remains uncertain, given the mixed signals coming from the US economy. While inflation fears have cooled somewhat, there are still concerns about the ongoing supply chain disruptions and their impact on prices.
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In conclusion, despite pressure on US Treasury bond yields, the USD/JPY pair has rebounded from a one-month low. The move has been buoyed by promises of increased pay hikes by major Japanese companies, aimed at boosting domestic demand and stimulating economic growth. However, the outlook for USD/JPY remains uncertain, given the mixed signals coming from the US economy and the ongoing supply chain disruptions. As such, traders will need to remain vigilant and closely monitor market developments in order to make informed trading decisions.
