USD/JPY Current price: 109.20
- Rallying yields will likely overshadow falling equities in terms of USD/JPY reactions.
- US Treasury yields run to fresh multi-year highs, hitting safe-haven assets.
The USD/JPY pair is challenging its daily highs in the 109.20 region ahead of Wall Street's opening, as US Treasury yields keep rallying. The 10-year note yield reached surpassed the 3.0% threshold and holds on to gains, weighing on the safe-haven currency. Higher yields usually mean that market players are expecting higher interest rates, building the case for a dollar's run. Overnight, Japan released the All Industry Activity Index for February, which resulted at expected at 0.4%, doing little for the pair's direction, particularly with holidays in half Asia. The US session won't bring fresh macro news, but with stocks and yields, the pair will have enough for direction.
The pair is technically bullish, but the upward momentum faded as it is unable to run beyond its recent highs. Still, the 4 hours chart shows that technical indicators remain steady in overbought readings and that the price is at the upper end of its recent range, indicating that bulls have no aims to give up. 110.00 has become a possible target, should the current background, with little risk-aversion and soaring yields, remains the same.
Support levels: 109.00 108.65 108.30
Resistance levels: 109.40 109.85 110.05
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