USD/JPY jumps to highest in three days above 133.00 boosted by US Treasury yields

• Japanese Yen is among the worst performers weakened by higher US yields.
• Dollar posts mixed results after US data.
• USD/JPY up on Friday, and down for the week.

The USD/JPY broke above 132.80 and climbed to 133.15, reaching the highest level since Tuesday. US Treasury yields rose following several economic reports from the US and weighed on the Japanese Yen.

US data: more positives than negatives

The key report from the US was the Core Personal Consumption Expenditure Price Index which rose 0.2% in November, in line with expectations, and 4.7% from a year ago, a decline from the 5% in October. The inflation indicators are closely watched by the Federal Reserve.

Durable Goods Orders fell more than expected by 2.6%. The Michigan Consumer Sentiment Index came in at 59.7 in December, above the 59.1 of the preliminary estimate. New Home Sales surprised with a 5.8% increase in November to an annual rate of 640K, above the 600K of market consensus.

After all the economic reports, equity prices in Wall Street are heading lower, just like what happened on Thursday, when positive figures triggered a selloff. The difference on Friday is that bond yields are reacting more strongly, hence boosting USD/JPY.

The pair is hovering below 133.00, with a bullish intraday bias. Above the daily high the next resistance might be located around the 133.50 area. On the downside, the key support is the 132.50/60 band, a confluence of a horizontal level and an uptrend line from the weekly low. A break lower would change the intraday bias to neutral/negative.

Technical levels