USD/JPY climbs to 108.30 supported by rising US T-bond yields

10-year US T-bond yield gains more than 1% on Thursday.
Annual core CPI in June rises to 2.1% in the US.
US Dollar Index steadies near 97 following Thursday's sharp fall.

Eren Sengezer FXStreet

The USD/JPY pair dropped below the 108 mark earlier in the day amid the broad-based USD weakness but didn't have a difficult time staging a rebound in the second half of the day. As of writing, the pair was trading at 108.30, still down 0.15% on the day.

The monthly data published by the U.S. Bureau of Labor Statistics today showed that inflation, as measured by the core Consumer Price Index (CPI), ticked up to 2.1% in June to come in higher than the market expectation of 2%. Supported by the CPI reading, the US Dollar Index gained traction and erased a portion of the fall that it recorded following FOMC Chairman Powell's cautious remarks yesterday.

Additionally, the 10-year US Treasury bond yield turned north in the second half of the day and rose more than 1% to provide an additional lift to the positively correlated USD/JPY pair. Finally, major equity indexes in the U.S. started the day in the positive territory to confirm the risk-on environment, which allows investors to pull away from safe-havens.

The trade balance data from China on Friday could impact the pair's action during the Asian trading hours if it were to cause a change in the market sentiment. Later in the day, the U.S. economic docket will feature the Producer Price Index (PPI) data.

Technical levels to watch for

USD/JPY

Overview
Today last price	108.29
Today Daily Change	-0.17
Today Daily Change %	-0.16
Today daily open	108.46

Trends
Daily SMA20	108.05
Daily SMA50	108.92
Daily SMA100	110.14
Daily SMA200	110.82

Levels
Previous Daily High	109
Previous Daily Low	108.34
Previous Weekly High	108.64
Previous Weekly Low	107.53
Previous Monthly High	108.8
Previous Monthly Low	106.78
Daily Fibonacci 38.2%	108.59
Daily Fibonacci 61.8%	108.75
Daily Pivot Point S1	108.21
Daily Pivot Point S2	107.95
Daily Pivot Point S3	107.56
Daily Pivot Point R1	108.86
Daily Pivot Point R2	109.25
Daily Pivot Point R3	109.51

Author

Eren Sengezer

FXStreet

As an economist at heart, Eren Sengezer specializes in the assessment of the short-term and long-term impacts of macroeconomic data, central bank policies and political developments on financial assets.

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