USD/JPY recovers modestly to 109.80 after upbeat US data

• US Dollar Index advances to fresh multi-month highs above 99.40.
• Empire State Manufacturing Index rises sharply to help USD gather strength.
• Wall Street remains on track to open in negative territory.

The USD/JPY rose modestly in the last hour as the upbeat data from the US provided a boost to the greenback. As of writing, the pair was trading at 109.83, erasing 0.05% on a daily basis.

The data published by the Federal Reserve Bank of New York on Tuesday showed that the General Business Conditions Index of the Empire State Manufacturing Survey rose to 12.8 in February from 4.8 in January to beat the analysts' estimate of 5 by a wide margin.

With the initial market reaction, the US Dollar Index, which tracks the buck's performance against a basket of six major currencies, climbed to its highest level since the first day of October. At the moment, the index is up 0.33% on the day at 99.47.

Eyes on Wall Street

Despite the board USD strength, the risk-off atmosphere seems to be forcing the pair to stay in its daily trading range. The 10-year US Treasury bond yield is down 1.7% on the day and Wall Street's main indexes look to start the day in the negative territory.

Heightened worries over the potential negative impact of the coronavirus outbreak on US corporations after Apple said it might miss Q1 sales targets amid production disruptions and store closures are likely to weigh on the US stocks on Tuesday.

Technical levels to watch for