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USD/JPY moves higher to 108.80, session peaks

  • The pair clinches new multi-day highs around 108.80.
  • Higher US yields are supporting the upside in the pair.
  • US Retail Sales next of relevance in the calendar.

The better tone in the US money markets is helping USD/JPY to clinch fresh daily highs in the 108.80 region.

USD/JPY upside bolstered by yields

Spot is flirting with the upper bound of the multi-session consolidative theme prevailing since the start of the year on the back of rising US yields.

In fact, yields of the key US 10-year note are now advancing further and are approaching the 2.75% area, fresh 5-day tops, in a context of a stronger greenback.

Today’s US docket will include Retail Sales in December followed by Factory Orders, Durable Goods Orders, Trade Balance figures and the Beige Book.

What to look for around JPY

The Japanese safe haven should remain vigilant on the broad risk-appetite trends, particularly via developments in the US-China trade front. Another driver supporting the potential demand for JPY is the prospects of a no-hike by the Federal Reserve this year along with firm speculations of a slowdown in the US economy in the next months. On the domestic side, the monetary stance from the Bank of Japan is seen unchanged for the foreseeable future.

USD/JPY levels to consider

As of writing the pair is gaining 0.10% at 108.78 and faces the next up barrier at 109.08 (high Jan.8) followed by 109.81 (21-day SMA) and then 111.13 (200-day SMA). On the flip side, a breach below 107.77 (low Jan.10) would aim for 107.51 (low Jan.4) and then 104.65 (2019 low Jan.2).

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