Daily Analysis USDJPY - 9 Aug 2023

The improvement in China's factory-gate inflation, along with positive news from the Biden Administration, has eased market pessimism and given a break to buyers of the yen pair. Previously, negative factors like Italy's surprise tax on bank profits, downgrades of US banks, UK recession fears, and China's economic slowdown weighed on sentiment, affecting USD/JPY. Additionally, concerns about US and Japanese Treasury bond yields, tensions between Japan, China, and the US, as well as the Bank of Japan's easy-money policy impact the USD/JPY pair. The ongoing low bond yields and the weakened US Dollar Index contribute to these dynamics. Looking ahead, the pair might consolidate gains ahead of key economic data releases.

USDJPY is influenced by the ongoing dollar correction, with the median line on the extended bullish trend serving as noticeable resistance, particularly evident on the daily chart.