12 May 2015
Higher treasury yields boost USD/JPY beyond 120.00
FXStreet (Mumbai) - The US dollar remains heavily bid versus the Japanese yen in the European morning, lifting USD/JPY towards 120.50 levels, largely on the back of rising US treasury yields amid a data-light trading session. While market awaits US JOLTS jobs openings numbers and Fed’s Williams speech for further momentum.
USD/JPY supported at 120
Currently, the USD/JPY pair trades 0.12% higher at 120.23, retreating from fresh session highs posted at 120.28. The USD/JPY pair advances mainly driven by higher yields on US treasuries in anticipation of Fed’s William hawkish comments.
The 10—yr and 2-yr yields on treasuries stand at 2.30% and 0.632% respectively, both recording over 1.50% gain on the day. However, broad based US dollar strength may keep the upside restricted near 120.50/70 zone.
Meanwhile, Emmanuel Ng, FX Strategist at OCBC Bank notes, “Background support for the greenback from US yields may continue to prop up the USD-JPY in the near term, with the Fed’s Williams also noting that the prospect of a rate increase are “on the table at every meeting. Initial support is expected into the 55-day MA (119.90) with resistance expected towards 120.50/70 intra-day.”
Later this week, traders will focus on April's US retail trade numbers, which will provide more clarity in terms of the economic rebound that can be expected in the early second quarter.
USD/JPY Technical Levels
To the upside, the next resistance is located at 120.30 (May 1 High) levels and above which it could extend gains 120.54 (May 5 High) levels. To the downside immediate support might be located at 120 below that at 119.43 (May 11 Low) levels.
USD/JPY supported at 120
Currently, the USD/JPY pair trades 0.12% higher at 120.23, retreating from fresh session highs posted at 120.28. The USD/JPY pair advances mainly driven by higher yields on US treasuries in anticipation of Fed’s William hawkish comments.
The 10—yr and 2-yr yields on treasuries stand at 2.30% and 0.632% respectively, both recording over 1.50% gain on the day. However, broad based US dollar strength may keep the upside restricted near 120.50/70 zone.
Meanwhile, Emmanuel Ng, FX Strategist at OCBC Bank notes, “Background support for the greenback from US yields may continue to prop up the USD-JPY in the near term, with the Fed’s Williams also noting that the prospect of a rate increase are “on the table at every meeting. Initial support is expected into the 55-day MA (119.90) with resistance expected towards 120.50/70 intra-day.”
Later this week, traders will focus on April's US retail trade numbers, which will provide more clarity in terms of the economic rebound that can be expected in the early second quarter.
USD/JPY Technical Levels
To the upside, the next resistance is located at 120.30 (May 1 High) levels and above which it could extend gains 120.54 (May 5 High) levels. To the downside immediate support might be located at 120 below that at 119.43 (May 11 Low) levels.