USD/JPY recovers modestly from daily lows, steadies near 108.60
- BoJ Governor Kuroda reiterates their readiness to ease the policy.
- US Dollar Index looks to close third straight day with losses.
- 10-year US Treasury bond yield clings to small daily gains.
The USD/JPY pair fell to a daily low of 108.47 in the early trading hours of the American session but was able to stage a technical rebound in the last couple of hours. As of writing, the pair was trading at 108.63, erasing 0.11% on a daily basis.
Brexit remains in focus on Thursday
The United Kingdom and the European Union on Thursday reached a Brexit deal that is subject to the approval of the UK parliament and allowed risk on flows to continue to dominate the markets. Although it's still unclear if British Prime Minister Boris Johnson will receive enough support after the Northern Ireland’s Democratic Unionist Party (DUP) formally rejected the proposed deal, the interest for safe-haven assets remained relatively weak throughout the day.
Major equity indexes in the United States started the day in the positive territory boosted by upbeat third-quarter earnings figures from large corporations such as Netflix and Morgan Stanley and kept the positive mood intact in the second half of the day.
In the meantime, while speaking to reporters in Washington at the International Monetary Fund and Group of 20 finance leaders' meetings, Bank of Japan Governor Haruhiko Kuroda reiterated that they are ready to ease the policy without hesitation if risks heighten over prospects for hitting the price target.
On the other hand, today's data from the US revealed that industrial production and manufacturing production both contracted in September to weigh on the Greenback. The US Dollar Index slumped to its lowest level since late August at 97.50 on Thursday and failed to make a meaningful recovery. At the moment, the index is down 0.4% on the day at 97.61.
Technical levels to watch for