Market news
16.05.2022, 09:03

USD/JPY spikes back closer to mid-129.00s, lacks follow-through buying

  • USD/JPY attracted some dip-buying on Monday amid fading safe-haven demand.
  • Sliding US bond yields kept the USD bulls on the defensive and capped the upside.
  • The Fed-BoJ policy divergence supports prospects for additional near-term gains.

The USD/JPY pair rallied around 60-65 pips during the early European session and shot back closer to the top end of its daily trading range, around mid-129.00s in the last hour.

The pair attracted some dip-buying near the 128.70 region on Monday and turned positive for the second straight day, with bulls now looking to build on last week's goodish rebound from mid-127.00s. Signs of stability in the financial markets undermined the safe-haven Japanese yen and acted as a tailwind for the USD/JPY pair. That said, a combination of factors held back bulls from placing aggressive bets and capped spot prices.

Investors now seem worried about softening global growth amid the prospects of a more aggressive move by major central banks, the war in Ukraine and China's zero-COVID-19 policy. The fears were further fueled by shockingly weaker Chinese macro data. This, along with geopolitical tensions, extended some support to traditional safe-haven assets. This, in turn, saw the benchmark 10-year yields retreat from the recent peak of 3.20%, which kept the US dollar bulls on the defensive and kept a lid on any meaningful gains for the USD/JPY pair.

Nevertheless, the fundamental backdrop supports prospects for the resumption of the recent appreciating move amid a big divergence in the monetary policy stance adopted by the Fed and the Bank of Japan. Market participants now look forward to the US Empire Manufacturing PMI for a fresh impetus later during the early North American session. This, along with the US bond yields and the broader risk sentiment, should allow traders to grab some short-term opportunities around the USD/JPY pair.

Technical levels to watch


© 2000-2022. All rights reserved.

This site is managed by Teletrade D.J. Limited 20599 IBC 2012 (First Floor, First St. Vincent Bank Ltd Building, James Street, Kingstown, St. Vincent and the Grenadines).

The information on this website is for informational purposes only and does not constitute any investment advice.

AML Website Summary

Risk Disclosure

Making transactions on financial markets with marginal financial instruments opens up wide possibilities and allows investors who are willing to take risks to earn high profits, carrying a potentially high risk of losses at the same time. Therefore you should responsibly approach the issue of choosing the appropriate investment strategy, taking the available resources into account, before starting trading.

Privacy Policy

Use of the information: full or partial use of materials from this website must always be referenced to TeleTrade as the source of information. Use of the materials on the Internet must be accompanied by a hyperlink to Automatic import of materials and information from this website is prohibited.

Please contact our PR department if you have any questions or need assistance at

Live Chat E-mail
Choose your language / location