USD/JPY tests 112 as 10-year US T-bond yield gains nearly 2% on the day
|- Wall Street rises in early trade on Friday.
- 10-year T-bond yield adds nearly 2%.
- US Dollar Index remains on track to finish the week below 97.
Despite the broad-based USD weakness, the USD/JPY preserved its bullish momentum on Friday and touched the 112 mark for the first time since early March boosted by the upbeat market sentiment. As of writing, the pair was trading at 111.97, adding 0.28% on a daily basis.
Earlier today, the data from China showed a much higher trade surplus than expected in March and allowed investors to move away from safe-havens such as the JPY. Reflecting the strong risk-appetite, the 10-year T-bond yield in the U.S. gained traction on Friday and was last seen up 1.9% on the day. Additionally, Wall Street clings to strong gains after opening the day in the positive territory.
On the other hand, the US Dollar Index, which closed the previous day above the 97 handle, struggled to build on yesterday's gains to reveal a weakening demand for the greenback. At the moment, the DXY is losing 0.37% on the day at 96.80, keeping the pair's upside capped for the time being.
Today's data from the U.S. showed that import prices rose 0.6% on a monthly basis in March to beat the market expectation of 0.4% and the UoM's Consumer Confidence Index edged down to 96.9 in April's flash estimate from 98.4 in March.
Technical levels to consider
With a daily close above 112 (psychological level/daily high), the pair could target 112.60 (Dec. 12, 2018, high) and 113.35 (Dec. 10, 2018, high). On the downside, supports could be seen at 111.50 (200-DMA), 111.10 (50-DMA) and 110.80 (Apr. 10 low).
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