- The pair’s upside faltered around 107.90 earlier in the day.
- US 10-year yields sidelined below 2.90% ahead of 5-year auction.
- FOMC minutes grab all the attention later in the NA session.
The US Dollar Index, which tracks the buck vs. its main rivals, is extending the positive momentum vs. the Japanese safe haven and lifting USD/JPY to the vicinity of the 108.00 mark albeit losing some momentum afterwards.
USD/JPY focused on FOMC
Spot is gaining ground since Friday, managing to rebound from the mid-105.00s, or 15-month lows, to today’s peaks in the 107.80/90 band.
Yields of the key US 10-year benchmark continue to sustain the up move in the pair and seem to have returned to be a key driver behind the price action around the greenback.
Looking ahead the FOMC minutes will be the salient event later today, as investors will closely follow the Committee’s views on the tightening cycle and the probable impact of fiscal measures on the Fed’s rate path.
Prior to the FOMC minutes, Markit will publish its advance measure of the manufacturing PMI for the current month, seconded by January’s existing home sales and the API’s weekly report on US crude oil supplies.
Furthermore, the 5-year note auction will also gather attention following yesterday’s 2-year note auction, which climbed to the highest level in a decade.
USD/JPY levels to consider
As of writing the pair is up 0.21% at 107.56 facing the next hurdle at 107.90 (high Feb.21) seconded by 108.42 (21-day sma) and then 110.48 (high Feb.2). On the flip side, a breakdown of 105.53 (2018 low Feb.16) would open the door to 102.54 (low Nov.3 2016) and finally 101.15 (low Nov.9 2016).
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