USDJPY slides as sluggish US Dollar, downbeat yields join strong Japan inflation

Market sentiment remains dicey on early Friday as traders struggle between expectations of China stimulus and looming debt market fears triggered by top-tier real-estate companies. Also challenging the traders could be a lack of data/events, as well as indecision about the Fed’s next move after the recently upbeat US statistics taming the market’s bets on the September policy pivot.

Even so, strong Japan data joins a pullback in the US Treasury bond yields to entertain the USDJPY sellers.

Additionally, downbeat prints of UK Retail Sales allowed GBPUSD to pare the weekly gains, the biggest among major currency pairs, despite the sluggish US Dollar.

Elsewhere, AUDUSD and NZDUSD edge higher whereas the Gold and Crude oil lick their wounds with mild gains. It’s worth noting that equities and stock futures remain indecisive by the press time.

Talking about the cryptos, BTCUSD remains pressured at the lowest level in two months after marking the biggest daily fall since November 2022 whereas the ETHUSD pare the longest daily slump in four months amid the market’s stabilization.

Following are the latest moves of the key assets:

• Brent oil rises for the second consecutive day despite lacking upside momentum around $84.00 of late.
• Gold price prints mild gains at the five-month low, recently firmer around $1,895.
• USD Index stays defensive near 103.40 after reversing from two-month high the previous day.
• Wall Street benchmarks kept closing in the red while the stocks in the Asia-Pacific zone edged lower. That said, equities in Europe and UK print losses by the press time.
• BTCUSD and ETHUSD remain pressured at the lowest level in two months, near $26,500 and $1,700 at the latest.

Cryptos, USDJPY entertain traders amid sluggish markets

While trading sentiment was mostly dicey, the downbeat performance of the USDJPY and BTCUSD entertained momentum traders on early Friday. It’s worth noting that a strong Japan inflation pushed back dovish concerns about the BoJ and weighed on the Yen pair whereas the US SEC’s intermediate victory in a legal battle against the industry players drowned the Bitcoin prices.

On a different page, China news failed to provide any clear directions to the Aussie and Kiwi while USDCNH remains sidelined at the yearly peak. That said, a surprise fall in the UK’s Retail Sales for July weighed on the GBPUSD despite bucking the broad trend of favoring the Greenback’s strength among the top-tier currency pairs.

Apart from what’s already mentioned above, the traders’ cautious mood ahead of next week’s speeches by the key central bankers at the annual Jackson Hole Symposium event also limits the market’s moves.

• Strong buy: USDCAD
• Strong sell: ETHUSD, GBPUSD, Gold
• Buy: USD Index, Nasdaq, USDJPY
• Sell: DAX, FTSE 100, BTCUSD, AUDUSD, EURUSD

Nothing major to watch

The final readings of Eurozone inflation for July and the Canadian Industrial Production for Q2 2023 will decorate the calendar. However, major attention will be given to the yields and risk catalysts as traders doubt the previous consensus of witnessing a halt in the rate hikes at top-tier central banks.

May the trading luck be with you!