USD/JPY hits fresh highs but remains limited above 108.50
|- Dollar rose further against the Japanese yen despite a slide in the DXY.
- Higher US yields and Wall Street gains support upside in USD/JPY.
The USD/JPY rose further during the American session and reached at 108.62, the highest level since Thursday’s mini flash crash. As of writing trades slightly above 108.50, around the same level it closed on Friday.
The pair climbed despite the slide in the US Dollar Index. The DXY dropped below 95.70 and heads for the lowest close since mid-October. The greenback lost momentum after US data but managed to find support versus the yen. The ISM Non-Manufacturing PMI fell to 57.6 in December, below market expectations. It shows that the sector continues to expand but is another negative surprise.
Supporting the upside in USD/JPY are higher US yields and Wall Street. The 10-year is at daily highs at 2.68% while the Dow Jones is up 0.55% and the Nasdaq 1.25%.
USD/JPY Short-term levels
To the upside, resistance levels might be seen at 109.00, 109.15 and 109.50 (Dec 31 low). On the flip side support levels could be seen at 108.00 (psychological / daily low), 107.40 (Jan 4 low) and 106.70.
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