USD/JPY kicks higher toward sessions’ highs amid stronger USD

USD bulls attacking in in late European session amid higher US bond yields.
USD/JPY gets a boost and is targetting the high of the day.

Flavio Tosti Independent Analyst

The USD/JPY is trading at around 107.41 on Thursday up 0.17% as the US dollar bulls came out of nowhere in late European session driven by higher bond yields.

The dollar benefited from positive housing data this week and Fed members, which were rather optimistic in their speeches. Dudley Williams, the incoming President of the New-York Federal Reserve was especially upbeat on the economy.

On the broader picture, US yields are higher, while gold is down flirting with $1,340 a troy ounce.

On Thursday US equities are seeing a pullback from the recent advance which was driven by enthusiasm around the earnings season on Wall Street. Investors have been sweeping concerns over Russian sanctions and trade wars under the rug of late as the “Trump risk” as called by some analysts seems to be priced in.

The yen is sensitive to geopolitical turmoils and stock market panic as it is seen as a safe-haven currency. After the recent gains in stocks, it is natural to see some profit-taking at some point. The yen is relatively soft against the USD confirming that the market is not in panic mode.

The day is relatively light on the calendar. A speech by FOMC member, Loretta J. Mester, president and chief executive officer of the Federal Reserve Bank of Cleveland, is slated for 22:45 GMT while the Japanse National Consumer Price Index (CPI) dataset is scheduled for 23:30 GMT. The National CPI is not as relevant as the Tokyo CPI, however, investors will be on the lookout for any strong deviation.

USD/JPY 4-hour chart

The USD/JPY has a bullish momentum and support lie at 106.87 and 105.73 swing lows while resistance is priced in at 107.53 swing high and at 107.79 cyclical high.

Author

Flavio Tosti

Independent Analyst

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