USD/JPY jumps to 2-week tops amid reviving USD demand
• Resurgent USD demand helps regain traction.
• Fading safe-haven demand provides an additional boost.
• Comments by St. Louis Fed President Bullard capped additional gains.
The USD/JPY pair reversed a modest dip to session low level of 112.28 and jumped to 2-week tops during the early NA session.
A fresh wave of US Dollar buying interest, backed by a modest rebound in the US Treasury bond yields, lifted the pair back into positive territory for the fourth consecutive session.
Adding to this, a goodish recovery in equity markets, with the German DAX recovering around 1% from lows, further dented the Japanese Yen's safe-haven appeal and also collaborated to the pair's sharp up-move over the past hour.
Meanwhile, some bearish comments by St. Louis Fed President James Bullard, saying that the Fed should refrain from raising short-term interest rates amid weaker inflationary pressure, now seems to have capped additional gains, at least for the time being.
Other influential FOMC members, due to speak on Friday, include Dallas Fed President Robert Steven Kaplan and Philly Fed President Patrick Harker, which along with the US ISM manufacturing PMI would now be looked upon for some fresh bullish impetus.
Valeria Bednarik, American Chief Analyst at FXStreet writes, "the 4 hours chart shows that the pair holds above its 100 SMA, but barely, while technical indicators hold near overbought readings, trying to regain the upside without momentum and below previous highs. Upcoming direction will depend as usual on yields' behavior, although a retracement in Wall Street after the last two-day rally, could undermine the potential upward on this last day of the week."