USD/JPY intermarket: risk-on Wall Street and yields up, USD/JPY up to challenge 111 handle

Ross J Burland FXStreet

Currently, USD/JPY is trading at 110.76, up 0.09% on the day, having posted a daily high at 110.84 and low at 110.17.

USD/JPY has rallied with a recovery in the equities on Wall Street. Benchmarks such as the Dow Jones and S&P 500 has tallied up gains exceeding the pre-healthcare failures levels in the case of the latter while the Dow Jones is 90% of the way there.

At the same time, US yields are up, with the 10-year rallying from 2.3585 to 2.4070 so far as risk turns positive. Should 10 years move back to 2.44 and 2.51, the spread between the US and Japan could equate to USD/JPY moving back onto the 111 and the 113 handles respectively.

USD/JPY levels

Buy USD/JPY with target at 112.75 - Westpac

While the market continues to recover and yields rise, rallies could find initial resistance at 113.44 and 16th March highs. For a highly bullish case, a break through 115.62 and the 17th Jan weekly high opens the 16-month resistance line at 117.52. To the downside, 109.90 is key as being the 50% of the Nov/Dec rally.

Author

Ross J Burland

FXStreet

Ross J Burland, born in England, UK, is a sportsman at heart. He played Rugby and Judo for his county, Kent and the South East of England Rugby team.

AUD/USD sticks to neutral bias above 0.7100 amid cautious markets

AUD/USD holds steady above 0.7100 in the Asian session on Monday as the US Dollar stalls its modest pullback from the highest level since late July amid persistent geopolitical uncertainties. The PBOC status quo on Loan Prime Rates also weighs on the Aussie. However, bets on another RBA rate hike continue to underpin the Australian Dollar ahead of the Trump-Xi Summit.

USD/JPY eases below 157.00 amid looming intervention risks

USD/JPY is easing back below 157.00 in Asia on Monday, undermined by modest Japanese Yen strength amid looming intervention risks after Friday's BoJ rate check. A Japanese holiday also keeps traders on edge amid escalating geopolitical tensions between Russia and Ukraine and in the Middle East. As a result, the US Dollar pauses its pullback, limiting the pair's downside.

Gold remains depressed around $4,350 amid rate jitters, modest USD strength

Gold maintains its offered tone through the first half of the European session, and currently trades around $4,350, down over 0.50% for the day. The commodity, however, holds comfortably above a six-week low, touched last Wednesday as traders await further developments around the Middle East crisis and their implications for inflation. This, in turn, would influence interest rate expectations and, in turn, drive the non-yielding bullion.

Bitcoin hits $85,000 for the first time in eight months

Bitcoin price reclaims $85,000 on Monday, advancing last week’s 5% recovery toward an eight-month high. The recovery in King Crypto aligns with renewed institutional demand, with Exchange Traded Funds (ETFs) recording $433 million in inflows on Friday.

The week ahead: Fuel prices in focus as we lead up to key eco releases

Financial markets are in a strange position as we move to the final weeks of Q3, uncertainty and volatility continue to grip markets, but the oil price is falling; and European and US stocks are poised to open higher later on Monday. Market stresses are concentrated in sovereign bonds, and European and US yields had another scare late on Friday, and moved higher.

BoJ Recap: Not as hawkish as expected

The Bank of Japan (BoJ) raised its short-term interest-rate target to 1.25% from 1.00% in a 7-2 vote, marking another step in the normalisation of monetary policy and widely matching what everyone has been expecting for weeks.