The greenback stays bid vs. its Japanese counterpart at the beginning of the week, with USD/JPY keeping the trade around the 114.00 neighbourhood.
USD/JPY propped up by US yields
Spot opened the trading week with a gap higher and has quickly left behind October’s peaks in the mid-113.00s backed by a continuation of the healthy upside in US yields.
In fact, the key US 10-year benchmark stays close to the critical 2.40% handle, underpinning the bull run in the US Dollar Index to levels just below the key up barrier at 94.00 the figure.
No further moves in the Japanese currency following the expected win by PM S.Abe, while the greenback appears supported by expectations of extra tightening by the Federal Reserve by year-end and the likelihood of the implementation of the Trump’s tax reform in Q4.
News from the speculative community noted JPY net shorts decreased to 2-week lows in the week to October 17, according to CFTC report.
In the US data space, only the Chicago Fed index is expected today ahead of tomorrow’s flash manufacturing PMI and Wednesday’s durable goods orders.
USD/JPY levels to consider
As of writing the pair is gaining 0.33% at 113.90 and a break above 114.10 (high Oct.23) would open the door to 114.39 (high May 11) and finally 114.51 (high Jul.11). On the other hand, the immediate support is located at 113.58 (high Oct.20) seconded by 112.64 (10-day sma) and then 111.75 (200-day sma).
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