Following Wednesday's upsurge, the USD/JPY extended its rally and reached its highest level since early April at 110.82. However, the pair reversed its direction in the second half of the day and was last seen losing 0.25% on a daily basis at 110.40. Despite the unabated USD strength, a sharp decline witnessed in the US Treasury bond yields seems to be weighing on USD/JPY. At the moment, the benchmark 10-year US T-bond yield is down 2.3% on the day at 1.541%. On Wednesday, the hawkish shift seen in the FOMC's Summary of Projections provided a boost to the greenback.
With the number of policymakers expecting a lift-off in the fed funds rate from zero in 2023 rising to 13 from seven in March, the US Dollar Index (DXY) gained nearly 1% on a daily basis. At the moment, the DXY is up 0.42% on the day at 91.77. Earlier in the day, the data published by the US Department of Labor revealed that the weekly Initial Jobless Claims rose to 412,000 from 375,000. Nevertheless, this data failed to trigger a meaningful market reaction. On Friday, the Bank of Japan (BoJ) will announce its Interest Rate Decision and release the Monetary Policy Statement.