USD/JPY: yen´s momentum eases but bears still in the driver's seat

USD/JPY Current price: 106.71

  • Japan Finance Minister, Taro Aso, doesn't seem concerned about yen's strength.

  • US Treasury yields reach fresh 4-year highs ahead of the US opening.

The Japanese yen kept advancing against its major rivals, fueled overnight by comments from Japanese Finance Minister Taro Aso, who said that the current yen strength "doesn’t warrant special intervention." The USD/JPY pair fell to 106.17, its lowest since November 2016, before bouncing modestly, to the current 106.70 price zone. 

Dollar's broad weakness offsets a run in equities and yields, as worldwide stocks' markets are up for the day, while the 10-year note yield peaked 2.94% so far today, a fresh 4-year high, currently at 2.92%. The 30-year note yield, on the other hand, retreated to 3.16% after closing Wednesday at 3.18%, now at 3.17%.

Ahead of Wall Street's opening, the US is going to release the NY Empire State Manufacturing index, seen at 17.5 in January from the previous 17.5, January's PPI, weekly unemployment claims and the Philadelphia Fed Manufacturing Survey, forecasted for February at 21.1 from 22.2 in January. Later in the day, the US will release its Capacity Utilization, and Industrial Production, alongside with the NAHB Housing index. Still, the main focus will be on equities and yields.

Technically, the pair is bearish despite the ongoing bounce, as in the 4 hours chart, it continued posting lower lows below a bearish 100 SMA, this last around 108.80. Technical indicators in the mentioned chart have bounced from oversold readings but remain well into negative territory, with limited upward strength. The ongoing advance can gain traction above 106.80, with scope then to extend its gains up to the 107.55 region.

Support levels:  106.50 106.15 105.70

Resistance levels: 106.80 107.10 107.55

View Live Chart for the USD/JPY

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