USD/JPY holds steady near 2-week tops, bulls await a move beyond 110.00 mark
- USD/JPY remains well bid for the fourth consecutive session on Thursday.
- Diminishing demand for traditional safe-haven assets weighed on the JPY.
- Stronger US data, positive US bond yields continued to underpin the USD.
The USD/JPY pair climbed to over two-week tops in the last hour, with bulls now looking to extend the momentum further beyond the key 110.00 psychological mark.
A combination of supporting factors helped the pair to quickly reverse an early dip to the 109.70 region and add to this week's positive momentum for the fourth consecutive session on Thursday.
USD/JPY supported by a combination of factors
Despite the rising death toll in China, hopes that the economic impact from the outbreak of coronavirus could be limited remained supportive of a further improvement in the global risk sentiment.
Investors' confidence got an additional boost on Wednesday following the news about progress towards finding treatment for the virus, though the World Health Organization played down the reports.
The risk-on flows, as depicted by a bullish trading sentiment around equity markets, continued undermining demand for the Japanese yen's perceived safe-haven demand and remained supportive.
On the other hand, the US dollar stood tall near two-month tops on the back of incoming stronger domestic data and the ongoing positive momentum in the US Treasury bond yields.
Wednesday's ADP report showed that the US private-sector employers added 291K new jobs in January, surpassing expectations by a big margin and marking the best level since May 2015.
Adding to this, the US ISM Non-Manufacturing PMI also came in better than market expectations and showed an uptick to 55.5 in January, indicating that the underlying economy remained on solid footing.
Meanwhile, slightly overstretched conditions on hourly charts held investors from placing any further bullish bets as the focus now shifts to Friday's release of the closely watched US jobs report (NFP).
Technical levels to watch