• A goodish pickup in the US bond yields helps gain some positive traction.
• Cautious mood does little to boost JPY’s safe-haven demand.
• Focus remains on the upcoming release of US monthly jobs data.
The USD/JPY pair broke out of its post-BOJ consolidative range and is now headed back towards the top end of its daily trading range.
With the US Dollar extending its subdued price action, the pair now seems to be taking cues from a goodish pickup in the US Treasury bond yields and jumped back to 106.85 level.
Apart from supportive bond yields, the up-move lacked any fundamental trigger and hence, could also be attributed to some repositioning trade ahead of today’s key event risk – the release of US monthly jobs report.
The headline NFP print is expected to come in to show an addition of 200K+ jobs, for the fourth month in the previous five. The key focus, however, would be on wage growth data, which if tops expectations should trigger a fresh leg of USD up-move and assist the pair to build on this week’s rebound from closer to 16-month lows.
Meanwhile, the market seems to have largely ignored weaker tone around the European equity markets, which tends to underpin the Japanese Yen’s safe-haven demand, with today’s steady BOJ supportive of the up-move.
Technical levels to watch
A convincing break through the 107.00 handle is likely to accelerate the up-move towards 107.30 supply zone before the pair eventually darts towards its next hurdle near the 107.75-80 region.
On the flip side, 106.50 level now seems to protect the immediate downside, which if broken is likely to accelerate the fall back towards the 106.00 handle.