- The USD / JPY posted modest daily gains on Wednesday.
- The yield on 10-year US bonds turned positive that day.
- Upcoming IHS Markit Manufacturing and Services PMI data.
The USD / JPY pair closed in negative territory on Tuesday amid falling US Treasury bond yields, but reversed its direction on Wednesday. At the time of writing, the USD / JPY was up 0.15% on a daily basis to 108.75.
The rally in US T bond yields supports the USD
Data released by the US Census Bureau found that durable goods orders in February fell 1.1%, compared to analysts’ estimate of an increase of 0.8%. While the market’s initial reaction to this data was largely subdued, the benchmark 10-year US T bond yield turned positive on the day of the US first session and helped the greenback strengthen. Currently, the US dollar index is up 0.19% on the day to 92.51.
Later in the session, IHS Markit will release preliminary manufacturing and services PMI figures for the United States. Investors expect the data to show that business activity in the US private sector continued to expand at a strong pace in March. In addition, New York Federal Reserve Chairman John Williams will deliver a speech at 5:35 p.m. GMT.
In the meantime, S&P 500 futures are up 0.3% on the day, suggesting that the greenback may struggle to outperform its rivals if risk flows start to dominate markets with the US stocks starting the day in positive territory.