USD/JPY rises amidst surging US Treasury yields and geopolitical tensions

USD/JPY trades above 149.80 as US 10-year Treasury bond yield hits its highest since 2007.
Housing Starts in the US show a 7% increase, while Building Permits see a 4.4% drop.
Fed officials adopt a neutral stance, reducing the chances of a November rate hike.
Ex-BoJ Board member Sakurai hints at a potential end to negative rates.

Christian Borjon Valencia FXStreet

The US Dollar (USD) pares its earlier losses against the Japanese Yen (JPY) and rises above the 149.80 area as the US 10-year Treasury bond yield climbs above 4.913%, its highest level since 2007. Risk aversion dominates the financial markets, though it failed to propel the Yen, as the major gains 0.05%.

US Dollar gains ground vs. Yen as risk-aversion drives the financial markets

US President Joe Biden's visit to Israel aimed to ease tensions within the Middle East spurred an escalation of the rhetoric, with Iran blaming Israel after an explosion at a Gaza hospital, which Biden clarified. Israel's chances of launching a ground attack at Gaza keep traders on edge, as portrayed by US equities posting losses while global bond yields surge.

The latest round of economic data showed that American households remain resilient amid an increase in September’s Retail Sales report. In addition, Industrial Production (IP) expansion portrays the US economy is robust. Wednesday’s economic data in the US revealed that Housing Starts rose 7% in September, while Building Permits plunged 4.4%.

Recent comments from US Federal Reserve officials show they have adopted a more neutral stance, which has diminished the chances for a hike in November, according to the CME FedWatch Tool. Nevertheless, odds for a quarter of a percent increase in January 2024 stand at 51.65%, keeping investors wary of further tightening.

On the Japanese front, an ex-Bank of Japan (BoJ) Board member, Sakurai, said the BoJ could end negative rates before tweaking the Yield Curve Control (YCC). A news article by Bloomberg reported the BoJ would upwardly revise its core inflation forecasts for fiscal years 2023 and 2024.

USD/JPY Technical Levels

USD/JPY

Overview
Today last price	149.87
Today Daily Change	0.05
Today Daily Change %	0.03
Today daily open	149.82

Trends
Daily SMA20	149.08
Daily SMA50	147.44
Daily SMA100	144.42
Daily SMA200	139.05

Levels
Previous Daily High	149.85
Previous Daily Low	148.76
Previous Weekly High	149.83
Previous Weekly Low	148.16
Previous Monthly High	149.71
Previous Monthly Low	144.44
Daily Fibonacci 38.2%	149.44
Daily Fibonacci 61.8%	149.18
Daily Pivot Point S1	149.11
Daily Pivot Point S2	148.39
Daily Pivot Point S3	148.02
Daily Pivot Point R1	150.19
Daily Pivot Point R2	150.57
Daily Pivot Point R3	151.28

Author

Christian Borjon Valencia

FXStreet

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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