USD/JPY advances to multi-year highs near 114.50 on rising US T-bond yields

• USD/JPY preserves its bullish momentum in the early American session.
• 10-year US Treasury bond yield is rising more than 3%.
• Retail Sales in the US rose unexpectedly in September.

The USD/JPY pair extended its daily rally in the early trading hours of the American session and was last seen trading at its strongest level in three years at 114.44, rising 0.68% on a daily basis.

10-year US T-bond yield rises sharply

The decisive rebound witnessed in the US Treasury bond yields following a three-day slide seems to be fueling USD/JPY's upside ahead of the weekend. The benchmark 10-year US T-bond yield is currently up 3.37% on the day at 1.565%.

Meanwhile, the upbeat data from the US seems to be helping the dollar stay resilient against its major rivals. At the moment, the US Dollar Index is posting small daily gains at 94.02. The US Census Bureau reported on Friday that Retail Sales in September increased by 0.7% on a monthly basis to $625.4 billion in September. This reading beat the market expectation for a contraction of 0.2%:

Meanwhile, US stocks index futures stay in the positive territory minutes ahead of the opening bell, suggesting that the risk-positive market environment is likely to allow USD/JPY to preserve its bullish momentum. 

Later in the session, the University of Michigan's preliminary Consumer Sentiment Index data for October will be the last data release of the week from the US.

Technical levels to watch for