USD/JPY extends its three-day winning spell
The USD/JPY extended its upside to near 149.20 on Wednesday. The asset continues to attract bids as the US Dollar is resilient amid deepening global slowdown fears. The major has continued its winning streak for the fourth trading session despite hopes of a stealth intervention in the FX domain by the Bank of Japan (BoJ) to support the Japanese Yen. S&P500 futures added decent gains in the London session, portraying an improvement in the risk appetite of the market participants. On Tuesday, US equities witnessed an intense sell-off as investors remain worried about the long-term outlook which is deteriorating as the Federal Reserve (Fed) is expected to keep interest rates higher for a longer period.
The US Dollar Index (DXY) extended upside to near 106.30 despite Consumer Confidence dropping in September. US Conference Board reported on Tuesday that the confidence of consumers in the US economy was seen declining in all age groups. The sentiment data dropped to 103.0 in September from August’s reading of 108.7. Households seem worried about sticky consumer inflation, political uncertainty, and higher interest rates. On Wednesday, the US Durable Goods Orders report for August will remain in focus. Investors have projected a contraction at a slower pace of 0.4%. In July, the economic data was contracted by 5.2%. A weak order book for core goods would demonstrate a bleak outlook for the manufacturing sector, which has been contracting for a long period. Meanwhile, the Japanese Yen struggles for a firm footing as BoJ Governor Kazuo Ueda supports the continuation of easy monetary policy conditions. BoJ Ueda cited the need for a sustained rise in wages to keep inflation stable above the 2% target for a secular period. Going forward, investors will focus on Tokyo’s inflation data, which will be released on Friday.