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USD/JPY nears 13-month high, boosted by Powell’s hawkish remarks, high US yields

  • USD/JPY extends its rally for the fifth day, flirting with the 151.00 level, driven by rising US Treasury yields and Fed Chair Powell's inflation concerns.
  • Market sentiment shifts following the University of Michigan data, indicating lower confidence in the economic outlook and persistent inflation fears.
  • Japanese Yen's further decline is tempered by intervention warnings from the Ministry of Finance, as officials emphasize the need for Forex movements to align with economic fundamentals.

The USD/JPY prolongs its rally to five consecutive days, exchanging hands above the 151.00 figure, shy of challenging the 13-month high reached on October 31 at 151.72. A jump in the 10-year US Treasury bond yield after a weak 30-year US bond auction and Federal Reserve (Fed) Chair Jerome Powell's hawkish pullback are tailwinds for the major. At the time of writing, the pair trades at 151.50’, posting minimal gains of 0.11%:

Yen struggles as USD/JPY approaches October peak, with US bond yields and Fed policy in focus

Marker participants continued to digest Powell{s words, which signaled the US central bank remains worried about inflation, and that it would raise rates if needed. Growing concerns that the policy is not sufficiently restrictive remain. That spurred a leg-up in the USD/JPY, along with the rise of US bond yields.

Meanwhile, a sudden improvement in market sentiment has witnessed US bond yields retreating some after data from the University of Michigan (UoM), suggests Americans are less confident regarding the economic outlook, as the index eased from 63.8 to 60.4. Regarding inflation expectations, upside risks are lingering, as households see prices climbing 4.4% in a year from now, and 3.2% in five years.

On the Japanese front, the USD/JPY remains capped due to intervention threats by authorities namely the Ministry of Finance (MoF). Officials had been jawboning that volatility and further Yen depreciation could suggest action from authorities. They remain saying that the Forex movement should reflect fundamentals.

Next week, the USD/JPY pair would get some cues of US Retail Sales, and inflation data in the United States (US).  In Japan, the calendar would feature the release of GDP, Industrial Production, and the Trade Balance.

USD/JPY Price Analysis: Technical outlook

Price action is about to test the year-to-date (YTD) high, which, if broken, could expose the USD/JPY for further upside, with buyers targeting 152.00. On the flip side, a failed breakout of the YTD high could form a ‘double top’ chart pattern which implies the exchange rate would fall further. In that outcome, the USD/JPY first support would be the Tenkan-Sen at 150.36, followed by Senkou-Span A at 150.15, ahead of testing the Kijun-Sen at 149.94.

(The story was corrected on November 10 at 18:34 GMT to say in the headline "13-month high" not "15-year highs" .)

USD/JPY

Overview
Today last price151.5
Today Daily Change0.12
Today Daily Change %0.08
Today daily open151.38
 
Trends
Daily SMA20150.14
Daily SMA50149.01
Daily SMA100146.09
Daily SMA200140.81
 
Levels
Previous Daily High151.39
Previous Daily Low150.77
Previous Weekly High151.72
Previous Weekly Low148.81
Previous Monthly High151.72
Previous Monthly Low147.32
Daily Fibonacci 38.2%151.15
Daily Fibonacci 61.8%151.01
Daily Pivot Point S1150.97
Daily Pivot Point S2150.56
Daily Pivot Point S3150.35
Daily Pivot Point R1151.59
Daily Pivot Point R2151.8
Daily Pivot Point R3152.2

Author

Christian Borjon Valencia

Markets analyst, news editor, and trading instructor with over 14 years of experience across FX, commodities, US equity indices, and global macro markets.

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