USD/JPY gains fade as the US dollar gives back gains | investingLive

The risk mood has stabilized somewhat following the US equity open. This was flagged first by FX as dollar sellers entered the fray a short time earlier.

Treasury yields have come down across the curve after the earlier spike, led by European sovereigns.

For USD/JPY, the lows just below 148.00 correspond with the 50% retracement of the rally that started in Asian trading. In the past few minutes, there has been a bounce to 148.12. Eye further support at 147.77, which is the 61.8% retracement.

Economic data today wasn’t exactly great for the US dollar as the ISM manufacturing report pointed to stagflation in the sector, and Friday’s news of a successful court challenge to the tariffs will paralyze investment decisions going forward.

For me, I don’t see a big pull towards the ‘risk off’ trade, aside from the poor September seasonals. Trump’s tariff getting removed would be unambiguously good for global growth and trade certainty. Yes, it could hurt sovereigns but the tariffs weren’t raising much money anyway (at least in the context of the massive US fiscal deficit).