USD/JPY recovers modestly toward 107, continues to trade in red
- ISM Manufacturing PMI for April came in higher than expected.
- US Dollar Index struggles to recover above 99 on Friday.
- Wall Street's main indexes suffer heavy losses on risk aversion.
The USD/JPY pair staged a technical rebound during the American trading hours and rose toward the 107.00 handle but failed to preserve its recovery momentum. As of writing, the pair was down 0.38% on a daily basis at 106.77. With today's drop, the pair remains on track to register its lowest weekly-close since early March.
US PMI data fails to improve market sentiment
Earlier in the day, the data published by the Institue for Supply Management (ISM) showed that the Manufacturing PMI dropped to 41.5 in April from 49.1 in March. Although this reading came in higher than the market expectation of 36.9, the market sentiment remained sour with Wall Street's main indexes suffering heavy losses.
However, the 10-year US Treasury bond yield reversed its direction and erased its daily losses to help the pair pull away from its lows. Nevertheless, the broad-based selling pressure surrounding the greenback forced the pair to remain in the negative territory.
Other data from the US revealed that Construction Spending surprisingly increased by 0.9% in March to beat analysts' estimate for a decline of 3.5%. There won't be any other macroeconomic data releases in the remainder of the day and the risk perception is likely to continue to drive the pair's action.
Technical levels to watch for