The buying activity in the US dollar keeps USD/JPY lifted in the Asian trading hours as the pair reached the levels last seen in March. At the time of writing, the pair is trading at 110.31, up 0.03% for the day.
The US Dollar Index rose to 90.5 on Thursday. The gains in the US dollar traced back to the upside in the US 10- year benchmark yields, which rose to 1.63% after upbeat US economic data.
The ADP unemployment report showed that US companies added 978K jobs in May, unlike the market expectations at 650K, the highest in the last 11 months. The Initial Jobless Claims dropped to 385K, much lower than the market expected. The Unit Labor Cost rose unexpectedly 1.7% in Q1 as compared to a fall of 0.3%.
The strong labor market and service data supported the narrative of the persistent inflation and sooner than expected Fed tapering. This, in turn, added to the attractiveness of the greenback.
On the other side of the coin, the Japan Prime Minister is likely to call for a sudden election after the Tokyo Olympics and Paralympics Games as per a media report. The speculation of another economic stimulus package to be announced before the snap election were also reported. The extension of lockdown in the major states weighs on the yen.
For Today, traders are preparing for the US Non-Farm Payrolls, Unemployment Rate data to gauge the market sentiment.
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