USD/JPY climbs to fresh 3-month tops near 110.30

  • The pair extends the rebound beyond the key 110.00 handle.
  • US 10-year yields in new multi-year peaks above 3.05%.
  • US Retail Sales missed estimates at 0.3% MoM.

The greenback is prolonging the upside vs. its Japanese counterpart today, lifting at the same time USD/JPY to fresh multi-month tops beyond 110.00 the figure.

USD/JPY looks to yields for direction

The pair is challenging fresh 4-month tops following the bullish move in yields of the key US 10-year note to the area beyond 3.05%, levels last traded in November 2011.

Lending extra legs to the buck, the Empire State manufacturing gauge surprised to the upside at 20.10 for the current month. On the not so bright side, US headline Retail Sales expanded less than forecasted 0.3% MoM, while Core Sales also expanded below expectations at a monthly 0.3%.

Still in the US, Dallas Fed R.Kaplan (non voter, hawkish) said earlier that the Fed should move to neutral rates, placing them in the 2.5%-3% range.

Later in the US docket, TIC Flows are due, seconded by Business Inventories and the NAHB index.

USD/JPY levels to consider

As of writing the pair is gaining 0.52% at 110.23 and a break above 110.30 (high May 15) would open the door to 110.48 (high Feb.2) and finally 111.50 (high Jan.18). On the downside, immediate contention is located at 108.96 (21-day sma) followed by 108.64 (low May 4) and then 108.47 (100-day sma).

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