USD/JPY steadily climbs to session tops, around 109.15-20 region
|- USD/JPY reversed an Asian session dip to sub-109.00 levels, closer to weekly lows.
- COVID-19 crisis in Japan, the risk-on mood continued weighing on the safe-haven JPY.
- An uptick in the US bond yields remained supportive; weaker USD might cap the upside.
- Friday’s key focus will remain on the closely-watched US monthly jobs report, or NFP.
The USD/JPY pair has managed to recover around 20-25 pips from the Asian session lows and was last seen trading near the 109.15 region, or daily tops.
The pair attracted some dip-buying on the last trading day of the week and reverse an intraday dip to sub-109.00 level. This marks the first day of a positive move in the previous two and was sponsored by a combination of factors.
Worries that the recent surge in COVID-19 cases could hinder Japan's fragile economic recovery continued acting as a headwind for the Japanese yen. This, in turn, was seen as a key factor that extended some support to the USD/JPY pair.
In the latest development, Japanese Economy Minister Yasutoshi Nishimura said this Friday that the advisory panel agreed to extend the covid-induced state of emergence until the end of May while expanding the coverage to other prefectures.
Apart from this, the underlying bullish sentiment in the financial markets further undermined the safe-haven JPY and provided a modest lift to the USD/JPY pair. Bullish traders further took cues from a goodish pickup in the US Treasury bond yields.
That said, the prevalent selling bias surrounding the US dollar might keep a lid on any runaway rally for the USD/JPY pair. Investors might also refrain from placing aggressive bets ahead of Friday's release of the closely-watched US jobs report.
Looking at the technical picture, the USD/JPY pair has been oscillating in a range over the past four trading sessions. This further makes it prudent to wait for a sustained move in either direction before positioning for the near-term trajectory.
Technical levels to watch
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers.