USD/JPY remains near session highs above 109

Eren Sengezer FXStreet

The USD/JPY pair spiked to a fresh weekly high at 109.48 in the US afternoon following the comments from U.S. Treasury Secretary Steven Mnuchin. After the initial reaction, the pair retreated back to 109.35, where it's still recording a daily gain of %0.45.

Mnuchin argued that the tax reform would happen weather the healthcare reform was done or not. The major equity indexes extended their daily gains afterwards and both the Dow Jones Industrial Average and the S&P 500 are up nearly 1% on the day. The improved risk sentiment is also reflected upon the U.S. T-bond yields, with the 10-year reference gaining 1.85% on the day. Higher yields translated into a stronger greenback, helping the DXY rise back to daily opening level.

Earlier during the day, the yen weakened against its rivals after Bank of Japan (BOJ) Governor Kuroda suggested that it was too early to talk about an exit strategy from the current monetary policy. Despite today's selling pressure on the yen, the currency could find some demand as a safe-haven before this weekend's elections in France, and help the dair erase some of its weekly gains.

Technical outlook

The pair could face the initial hurdle at 109.80 (200-DMA) ahead of 110 (psychological level) and 110.80 (Mar. 27 high). To the downside, supports are located at 109 (pyschological level) ahead of 108.10 (Apr. 17 low) and 107.75 (Nov. 15 low).

Author

Eren Sengezer

FXStreet

As an economist at heart, Eren Sengezer specializes in the assessment of the short-term and long-term impacts of macroeconomic data, central bank policies and political developments on financial assets.

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