USD/JPY intermarket: will USD/JPY play catch up in Tokyo?

Currently, USD/JPY is trading at 112.28, down -0.01% on the day, having posted a daily high at 112.34 and low at 112.24.

USD/JPY is lagging the 'risk-onness' that we witnessed on Wall Street and could be due a rally, playing catch-up with the following performances from overnight that would usually send the yen into a tailspin, courtesy of Oliver Renick at Bloomberg:

• S&P 500 up 0.9% to 2,440.69
• Dow Industrials up 144 to 21,455
• Financials up 1.6% for third straight advance
• Industrial and material shares gain 0.8%
• Energy stocks up 0.6% with oil up 1.4%
• Real estate shares little changed
• Utilities drop 1%
• Treasury yields climbed after their biggest advance since January following Fed Chair Janet Yellen’s indication that the U.S. economy can withstand higher interest rates; 10-year up 1bp
• VIX down to 10
• Volume in S&P 500 down ~7% from 30-day average

While USD/JPY was up on the day, it was falling shy of yesterday's high and lagging EUR/JPY's performace. The DXY could not catch a bid with a U-turn in the euro and sterling. If markets prefer a lower euro again, seeing this as a sell opportunity on the back of the comments today from the ECB arguing that the "market misjudged" the speech from Draghi yesterday, USD/JPY could well play catch up, especially on a risk-on open in Tokyo on the heels of Wall Streets positive performance overnight. 

Forex today: stocks rally as does the pound on Carney U-turn, DXY lower

USD/JPY levels

USD/JPY has 112.35 as the o/n high, 112.46 as yesterday's high, 112.72 the 16th May high. The ultimate upside target is the 114.38 recent high. "Dips should find initial support offered by the 200-day ma at 111.01," according to analysts at Commerzbank. 

Valeria Bednarik, chief analyst at FXStreet explained that, technically, the pair presents a positive short term tone. "Short-lived dip below the 112.00 Fibonacci support was quickly reverted, while the price holds above its 100 and 200 SMAs, as technical indicators are trying to regain the upside after a modest downward corrective movement from near oversold readings. "