USD/JPY reclaims 105.00 US T-bond yields push higher
17.06.2022, 14:58

USD/JPY reclaims 105.00 US T-bond yields push higher

  • USD/JPY is up more than 2% on a daily basis on Friday.
  • US Dollar Index tests 105.00 on the back of rising T-bond yields.
  • BOJ announced earlier in the day that it left its policy settings unchanged.

USD/JPY extended its daily rally in the second half of the day on Friday and climbed above 135.00. As of writing, the pair was up 2.3% on a daily basis at 135.20.

BOJ's inaction hurts JPY

Earlier in the day, the Bank of Japan (BOJ) announced that it left its policy settings unchanged. Following the Swiss National Bank's (SNB) unexpected rate hike on Thursday, JPY bulls were hoping for the BOJ to at least tweak its Yield Curve Control (YCC) policy. Commenting on the policy outlook, BOJ Governor Haruhiko Kuroda reiterated that they will not hesitate to ease the monetary policy further if needed and triggered a JPY selloff.

In the second half of the day, the benchmark 10-year US Treasury bond yield gained traction and helped the greenback gather strength against its major rivals.

At the time of press, the US Dollar Index was up 1.2% on the day at 105.05. Despite the sharp decline witnessed on Wednesday and Thursday, the index remains on track to close the third straight week in positive territory. 

Assessing USD/JPY's near-term outlook, "above 134.64/68 should add weight to our view for a fresh attempt to see a sustained move above the 135.20 high of 2002," said economists at Credit Suisse. "With a multi-year ‘secular’ base in place, we expect 135.20 to be “decisively cleared in due course with resistance then seen next at 135.85/87 and eventually 147.62/153.01."

Additional levels to watch for

 

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