USD/JPY reaches a YTD high above 122.00, last seen in December 2015

• The USD/JPY maintains the foot in the metal, extending its rally to five straight days.
• Fed officials maintain the view that 50 bps increases are not bad.
• US Initial Jobless Claims declined under the 200K mark, the lowest level since 1969.

The USD/JPY pair keeps extending its rally, breaking the 122.00 mark, underpinned by hawkish Fed speaking preparing to hike rates 50 bps in the May meeting, which spurred a jump in US Treasury yields amidst an upbeat mood in the financial markets. At the time of writing, the USD/JPY is trading at 122.30 at new YTD highs,

Of late, the market mood improved, as Europen equities made a U-turn after recording losses earlier in the North American session. Meanwhile, US stocks consolidated in the green, despite growing concerns of high inflation as the US central bank began its tightening cycle.

Firmer US Dollar keeps the Japanese yen pressured

In the meantime, the greenback remains resilient to fall, as it clings to gains, up 0.12%, sits at 98.724, while the US 10-year Treasury yield gains two and a half basis points, up at 2.341%.

Elsewhere, the Russia-Ukraine conflict is grabbing attention as NATO’s two-day summit is underway. Of note is that according to a senior US administration official, US President Biden told NATO that he supported increased NATO troops on the eastern front. The positive news on the front is that Ukrainian Chief of Staff Andriy Yermak said there was progress in the ceasefire negotiations with Russia and expressed “careful optimism,” as reported by Axio’s correspondent.

US central bank policymakers crossed the wires

Meanwhile, Fed speaking continued. The first policymaker to cross the wires was Minnesota’s Fed President Neil Kashkari. He said that there is a risk of overdoing it on rate hikes while reiterating that a neutral interest rate is around 2% for him. Later, Chicago Fed President Chris Evans said that the Fed’s first rate hike was “the first of many this year.” Evans added that he’s open to a 50 bps hike if needed and emphasized that the central bank may begin reducing the balance sheet while raising rates at the same meeting.

The US economic docket featured Initial Jobless Claims for the week ending on March 19, which fell the most since 1969. The reading came at 187K lower than the 212K foreseen. Later in the day, the Markit PMIs for March were revealed, which came better than expected.

Technical levels to watch