Economy Forex News

USD/JPY recovers to new three-year highs around 113.30

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  • USD/JPY breaks above the 113.00 level, a level last seen in December 2018.
  • Rising US Treasury yields and US dollar strength are the main drivers of USD/JPY.

USD/JPY is soaring during the US session, trading at 113.38, up 1.03% at the time of writing. The risk appetite environment, as evidenced by U.S. stock indices trading higher, registers gains between 0.43% and 0.86%. In addition, US Treasury yields, with 10-year yields above the 1.60% threshold, put upward pressure on USD/JPY.

USD/JPY

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US dollar resilience continues despite the dismal US nonfarm payrolls report.

Additionally, the US dollar index that measures the greenback’s performance against its rivals is up 0.16%, currently at 94.24, pressuring the Japanese yen and strengthening the greenback.

Although Friday’s nonfarm payroll report was worse than expected. The upward revision to August has kept hopes alive for a Fed tapering announcement. In addition, US stock indexes closed with losses and US Treasury yields rose, reinforcing the aforementioned, as investors did not buy on a dip.

On Tuesday, the Japanese economic docket will include the monthly and annual Producer Price Index and Bank Lending for September. For USD/JPY traders, the August JOLTS job openings and press releases from the Atlanta Fed and Raphael Bostic could provide a new catalyst.

USD/JPY Price Forecast: Technical Outlook

The USD/JPY is trading well above the daily moving average (DMA) above 113.00, supporting the bullish bias. As momentum indicators such as the Relative Strength Index (RSI) are at 75, it suggests that the pair is oversold, so a consolidation or a correction towards 113.00 might be in the cards.

Heading north, December 2018 swing highs around 113.50 is the first resistance level. A break of this will likely open the door for more bullish action. Next, the bid zone would be 114.00, and then the September 2018 swing highs around 114.55.

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Michelle D. Madsen

Michelle D. Madsen graduated from the University of Westminster and has been deeply involved in the world of finance ever since. She has worked as a Broadcast Journalist hosting various news shows and informative webcasts about the financial markets. Since 2004 she has also been writing for Metanews daily, her attention to detail, and her in-depth knowledge of the financial markets have led her to cover Foreign Exchange and commodities. The world of finance has changed in the last few years with the introduction and rising popularity of cryptocurrencies. She has in no means been left behind, adding this to her bank of intellect and is now also an expert in cryptocurrencies. For the last ten years, Ms. Madsen has been engaged in the financial market. She has notedly written a great number of incredibly informative reviews for the crypto exchange and forex brokers. Her wealth of knowledge has enabled her to become a leading expert in the field. She continues to inform the public writing up-to-date, thorough reviews for the readers of Metanews as she has for the last decade.
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