• A combination of supporting factors pushed USD/JPY higher for the second successive day.
  • The risk-on impulse, the Fed-BoJ policy divergence, rising US bond yields extended support.
  • Resurgent USD demand provided an additional lift, taking along stops near the 136.00 mark.

The USD/JPY pair built on its steady intraday ascent through the early North American session and shot to a fresh three-day high, around the 136.30 region in the last hour.

The markets turned optimistic amid hopes that inflation is nearing its peak, bolstered by the recent decline in commodity prices. Furthermore, China announced it would relax COVID-19 quarantine requirements for international travellers and raised expectations for a revival in global growth. This, in turn, boosted investors' confidence and undermined the safe-haven Japanese yen.

The risk-on flow pushed the US Treasury bond yields higher, widening the gap between the US-Japanese bond yields. This, along with the divergent monetary policy stance adopted by the Bank of Japan and the Federal Reserve, weighed heavily on the JPY. Apart from this, a strong pickup in US dollar demand also contributed to the strong bid tone surrounding the USD/JPY pair.

The intraday bullish momentum, also marking the third successive day of a positive move, could further be attributed to some technical buying above the 136.00 round-figure mark. This, in turn, might have already set the stage for an extension of the upward trajectory, back towards retesting a 24-year high, around the 136.70 region touched last week.

Moving ahead, the market focus now shifts to Fed Chair Jerome Powell's appearance on Wednesday. Market participants will look for clues about the US central bank's policy tightening path. This will play a key role in influencing the near-term USD price dynamics and help investors to determine the next leg of a directional move for the USD/JPY pair.

Technical levels to watch


Today last price 136.29
Today Daily Change 0.84
Today Daily Change % 0.62
Today daily open 135.45
Daily SMA20 133.58
Daily SMA50 130.69
Daily SMA100 124.91
Daily SMA200 119.34
Previous Daily High 135.55
Previous Daily Low 134.52
Previous Weekly High 136.72
Previous Weekly Low 134.26
Previous Monthly High 131.35
Previous Monthly Low 126.36
Daily Fibonacci 38.2% 135.16
Daily Fibonacci 61.8% 134.92
Daily Pivot Point S1 134.8
Daily Pivot Point S2 134.15
Daily Pivot Point S3 133.77
Daily Pivot Point R1 135.83
Daily Pivot Point R2 136.2
Daily Pivot Point R3 136.86



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