USD/JPY bounces in tandem with Treasury yields, recaptures 114.00
04.11.2021, 01:26

USD/JPY bounces in tandem with Treasury yields, recaptures 114.00

  • USD/JPY regains 114.00 and beyond amid an upbeat mood, rebound in T-yields.
  • The US dollar attempts a bounce after Fed’s Powell-induced blow.
  • Japanese traders return, volatility persists ahead of the US second-tier data.

USD/JPY is holding the higher ground above 114.00. having found strong bids near the 113.90 region, as the risk appetite returns along with the Japanese traders in the Fed’s aftermath.

Fed’s Powell says patience on rate hikes

The Fed announced the much-awaited tapering on Wednesday, reducing the bond-buying by $15 billion per month starting this month. Although Fed Chair Jerome Powell’s patient approach on raising interest rates lifted the market sentiment while smashing the US Treasury yields alongside the dollar.

So far this Thursday’s trading, the major is bouncing back above 114.00, tracking the rebound in the Treasury yields across the curve, which has put a fresh bid under the US dollar. The benchmark 10-year US rates are back above 1.60%, recovering from the post-Fed dip to near 1.54%.

Further, the Japanese traders return to markets after Wednesday’s public holiday, cheering the record close on Wall Street overnight, collaborating with the upside in the pair. The Nikkei 225 index is up 1% on the day, closing in on the 30,000 level.

Next of relevance for USD/JPY remains the US weekly jobless claims and trade data, as the JPY bulls ignored the upbeat Japanese Jibun Bank / Markit Services PMI for October, which arrived at 50.7 vs. 47.8 prior.

USD/JPY technical levels to consider

 

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