USD/JPY retreats after hitting 113.60 on risk aversion
- Japanese yen gains momentum amid risk aversion.
- USD/JPY peaked at 113.60 and then turned to the downside.
- Pair remains in recent range, flat for the week.
The USD/JPY climbed to 113.60 during the American session, boosted by a stronger US dollar and then pulled back, affected by risk aversion. It is hovering around 113.15/20, flat for the week. The pair continues to move in the recent range, unable to break the 113.60/80 area and supported around 112.70.
The dollar weakened and then rose following the release of the US employment report. The headline showed an increase in payrolls of 210K below the 550K expected. However, the report contained upbeat detail like a decline in the unemployment rate to 4.2%. Data from the service sector released later surpassed expectations.
The greenback gained more strength after Fed’s Bullard mentioned that the central bank could raise interest rates before completing the taper. Stock prices turned south in Wall Street and weighed on USD/JPY.
The pair continues to trade in a range without a clear direction, holding onto last week losses. A break under 112.70 should increase the bearish pressure, while above 113.85 the dollar could test 114.00.