USD/JPY advances to fresh daily highs above 110.70
- USD/JPY continues to push higher after closing above 110.00 on Monday.
- US Dollar Index fluctuates around 92.00 on Tuesday.
- Eyes on FOMC Chairman Jerome Powell's testimony at 1800 GMT.
After staying relatively quiet in a tight range above 100.00 during the first half of the day on Tuesday, the USD/JPY pair gained traction and reached a fresh daily high of 110.75. As of writing, the pair was up 0.4% on a daily basis at 110.73.
DXY clings to daily gains near 92.00
Although the greenback struggled to find demand on Monday, the late rebound witnessed in the US Treasury bond yield provided a boost to USD/JPY and helped it stage a sharp U-turn during the American session.
On Tuesday, the renewed USD strength is allowing USD/JPY to preserve its bullish momentum. The US Dollar Index is currently rising 0.18% on the day at 92.02. Later in the session, FOMC Chairman Jerome Powell will testify before the House Select Subcommittee on the Coronavirus Crisis at 1800 GMT.
The data from the US revealed on Tuesday that Existing Home Sales declined by 0.9% in May and the Richmond Fed Manufacturing Index improved modestly to 22 in June from 18 in May.
In the early trading hours of the Asian session on Wednesday, the Bank of Japan will release the June Monetary Policy Meeting Minutes. Jibun Bank Manufacturing PMI data will be featured in the Japanese economic docket as well.
Assessing the BoJ's policy outlook, "we keep our view for the BoJ to do more and enhance its monetary policy easing further and we are also cognizant that market expectations are now tilted to the BoJ having reached the limits of its monetary policy and will remain in a holding pattern on policy until at least April 2023 when Governor Kuroda is scheduled to leave the BOJ," said Calvin Liew, Senior Economist at UOB Group.
Technical levels to watch for